The shares of Cardinal Health, Inc. (NYSE:CAH) and STORE Capital Corporation (NYSE:STOR) were among the active stocks of the last trading sessions. Cardinal Health, Inc. (NYSE:CAH) declined to -0.11% closing at the price of $54.38 whereas the shares of STORE Capital Corporation (NYSE:STOR) soared 1.32% with the increase of 0.37 points closing at the price of $28.47. Cardinal Health, Inc. has currently decrease -14.99% in its stock over the period of 6-months while its rival STORE Capital Corporation added 13.07% 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 Cardinal Health, Inc. (NYSE:CAH) is -1.9% while the ROI of STORE Capital Corporation (NYSE:STOR) is 4.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CAH’s EBITDA Margin is 7.94 whereas STOR’s is 19.07.
Both the profitability ratios suggest that STORE Capital Corporation (NYSE:STOR) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Cardinal Health, Inc. (NYSE:CAH) reported $1.01/share EPS for the previous quarter where analysts were predicting an EPS to be $0.93/share Thus beating the analyst Estimates with a Surprise Factor of 8.6 Percent. While, STORE Capital Corporation (NYSE:STOR) reported EPS of $0.31/share in the last quarter. The analysts projected EPS of $0.22/share depicting a Surprise of 40.9 Percent.
Taking a look at Earnings per Share, STORE Capital Corporation tends to be beating the analyst estimates more than Cardinal Health, Inc.. so STOR is more profitable than CAH.
Technical Analysis of Cardinal Health, Inc. & STORE Capital Corporation
Moving average convergence divergence (MACD) shows that Cardinal Health, Inc. (NYSE:CAH) is on a PRICE RELATIVITY trend While STORE Capital Corporation (NYSE:STOR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Cardinal Health, Inc. was in BULLISH territory and STORE Capital Corporation was in BULLISH territory.
CAH’s current statistics gauge that the stock candle is BULLISH with LOW volatility. While STOR’s candle is BULLISH with HIGH.
EPS Growth Rate: CAH’s 4.94% versus STOR’s 5.87%
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 Cardinal Health, Inc. (NYSE:CAH) is predicted at 4.94% while STORE Capital Corporation (NYSE:STOR) stands at 5.87%. These numbers suggest that STOR 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 CAH stands at 1.1 while STOR is at 0 whereas the debt ratio of the prior is 1.49 while the debt ratio of the later is 0.79.
The values of the both ratios suggest that CAH 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 2.8 for CAH and 2.1 for STOR which means CAH has Hold rating whereas STOR 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 CAH is $54.93 which is 1% of its current price while STOR has price target of 30.08 which is 5.35% 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.
CAH currently has price to earning P/E ratio of 0 whereas STOR has 39.11 while the forward P/E ratio for the prior stands at 10.01 and for the later it depicts the value of 30.68.
The price to Book P/B for CAH is 2.78, Price to Sale is at 0.12 and for STOR these ratios stand at 1.65 and 11.92.