The shares of Eastman Chemical Company (NYSE:EMN) and Paramount Group, Inc. (NYSE:PGRE) were among the active stocks of the last trading sessions. Eastman Chemical Company (NYSE:EMN) declined to -4.88% closing at the price of $86.81 whereas the shares of Paramount Group, Inc. (NYSE:PGRE) declined -0.4% with the decrease of -0.06 points closing at the price of $14.85. Eastman Chemical Company has currently decrease -17.43% in its stock over the period of 6-months while its rival Paramount Group, Inc. added 5.54% 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 Eastman Chemical Company (NYSE:EMN) is 10.8% while the ROI of Paramount Group, Inc. (NYSE:PGRE) is 1.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, EMN’s EBITDA Margin is 8.35 whereas PGRE’s is 19.97.
Both the profitability ratios suggest a mixed sentiment for Eastman Chemical Company (NYSE:EMN) and Paramount Group, Inc. (NYSE:PGRE).
EPS & Surprise Factor
Eastman Chemical Company (NYSE:EMN) reported $2.22/share EPS for the previous quarter where analysts were predicting an EPS to be $2.21/share Thus beating the analyst Estimates with a Surprise Factor of 0.5 Percent. While, Paramount Group, Inc. (NYSE:PGRE) reported EPS of $0.05/share in the last quarter. The analysts projected EPS of $0.02/share depicting a Surprise of 150 Percent.
Taking a look at Earnings per Share, Paramount Group, Inc. tends to be beating the analyst estimates more than Eastman Chemical Company. so PGRE is more profitable than EMN.
Technical Analysis of Eastman Chemical Company & Paramount Group, Inc.
Moving average convergence divergence (MACD) shows that Eastman Chemical Company (NYSE:EMN) is on a PRICE RELATIVITY trend While Paramount Group, Inc. (NYSE:PGRE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Eastman Chemical Company was in BEARISH territory and Paramount Group, Inc. was in BEARISH territory.
EMN’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While PGRE’s candle is BEARISH with HIGH.
EPS Growth Rate: EMN’s 10.95% versus PGRE’s 0%
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 Eastman Chemical Company (NYSE:EMN) is predicted at 10.95% while Paramount Group, Inc. (NYSE:PGRE) stands at 0%. These numbers suggest that EMN 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 EMN stands at 1.7 while PGRE is at 0 whereas the debt ratio of the prior is 1.18 while the debt ratio of the later is 0.87.
The values of the both ratios suggest that EMN is more suitable investment when the liquidity and risk is the main concern.
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 2.4 for EMN and 2.8 for PGRE which means EMN has Hold rating whereas PGRE 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 EMN is $114.27 which is 24.03% of its current price while PGRE has price target of 17.13 which is 13.31% 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.
EMN currently has price to earning P/E ratio of 11.33 whereas PGRE has 0 while the forward P/E ratio for the prior stands at 9.31 and for the later it depicts the value of 95.81.
The price to Book P/B for EMN is 2.16, Price to Sale is at 1.29 and for PGRE these ratios stand at 0.87 and 4.85.