The shares of Smith (A.O.) Corporation (NYSE:AOS) and Intuit Inc. (NASDAQ:INTU) were among the active stocks of the last trading sessions. Smith (A.O.) Corporation (NYSE:AOS) declined to -3.69% closing at the price of $49.86 whereas the shares of Intuit Inc. (NASDAQ:INTU) soared 1.53% with the increase of 3.32 points closing at the price of $220.66. Smith (A.O.) Corporation has currently decrease -21.58% in its stock over the period of 6-months while its rival Intuit Inc. added 28.6% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Smith (A.O.) Corporation (NYSE:AOS) is 18.4% while the ROI of Intuit Inc. (NASDAQ:INTU) is 44.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AOS’s EBITDA Margin is 13.51 whereas INTU’s is 32.41.
Both the profitability ratios suggest that Intuit Inc. (NASDAQ:INTU) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Smith (A.O.) Corporation (NYSE:AOS) reported $0.66/share EPS for the previous quarter where analysts were predicting an EPS to be $0.62/share Thus beating the analyst Estimates with a Surprise Factor of 6.5 Percent. While, Intuit Inc. (NASDAQ:INTU) reported EPS of $0.32/share in the last quarter. The analysts projected EPS of $0.23/share depicting a Surprise of 39.1 Percent.
Taking a look at Earnings per Share, Intuit Inc. tends to be beating the analyst estimates more than Smith (A.O.) Corporation. so INTU is more profitable than AOS.
Technical Analysis of Smith (A.O.) Corporation & Intuit Inc.
Moving average convergence divergence (MACD) shows that Smith (A.O.) Corporation (NYSE:AOS) is on a PRICE RELATIVITY trend While Intuit Inc. (NASDAQ:INTU) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Smith (A.O.) Corporation was in BEARISH territory and Intuit Inc. was in BEARISH territory.
AOS’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While INTU’s candle is BULLISH with HIGH.
EPS Growth Rate: AOS’s 11.3% versus INTU’s 14.7%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Smith (A.O.) Corporation (NYSE:AOS) is predicted at 11.3% while Intuit Inc. (NASDAQ:INTU) stands at 14.7%. These numbers suggest that INTU is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of AOS stands at 2.2 while INTU is at 1.1 whereas the debt ratio of the prior is 0.14 while the debt ratio of the later is 0.19.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.2 for AOS and 2.2 for INTU which means AOS has Hold rating whereas INTU has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for AOS is $66.56 which is 25.09% of its current price while INTU has price target of 224.93 which is 1.9% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
AOS currently has price to earning P/E ratio of 21.34 whereas INTU has 46.11 while the forward P/E ratio for the prior stands at 17.1 and for the later it depicts the value of 30.17.
The price to Book P/B for AOS is 4.93, Price to Sale is at 2.75 and for INTU these ratios stand at 23.98 and 9.67.