The shares of Vmware, Inc. (NYSE:VMW) and U.S. Silica Holdings, Inc. (NYSE:SLCA) were among the active stocks of the last trading sessions. Vmware, Inc. (NYSE:VMW) declined to -1.42% closing at the price of $148.86 whereas the shares of U.S. Silica Holdings, Inc. (NYSE:SLCA) soared 2.34% with the increase of 0.47 points closing at the price of $20.53. Vmware, Inc. has currently increase 22.53% in its stock over the period of 6-months while its rival U.S. Silica Holdings, Inc. subtracted -25.37% 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 Vmware, Inc. (NYSE:VMW) is 11.1% while the ROI of U.S. Silica Holdings, Inc. (NYSE:SLCA) is 7.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, VMW’s EBITDA Margin is 24.28 whereas SLCA’s is 7.02.
Both the profitability ratios suggest that Vmware, Inc. (NYSE:VMW) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Vmware, Inc. (NYSE:VMW) reported $1.54/share EPS for the previous quarter where analysts were predicting an EPS to be $1.49/share Thus beating the analyst Estimates with a Surprise Factor of 3.4 Percent. While, U.S. Silica Holdings, Inc. (NYSE:SLCA) reported EPS of $0.64/share in the last quarter. The analysts projected EPS of $0.68/share depicting a Surprise of -5.9 Percent.
Taking a look at Earnings per Share, Vmware, Inc. tends to be beating the analyst estimates more than U.S. Silica Holdings, Inc.. so VMW is more profitable than SLCA.
Technical Analysis of Vmware, Inc. & U.S. Silica Holdings, Inc.
Moving average convergence divergence (MACD) shows that Vmware, Inc. (NYSE:VMW) is on a PRICE RELATIVITY trend While U.S. Silica Holdings, Inc. (NYSE:SLCA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Vmware, Inc. was in BEARISH territory and U.S. Silica Holdings, Inc. was in BULLISH territory.
VMW’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While SLCA’s candle is BULLISH with HIGH.
EPS Growth Rate: VMW’s 11.23% versus SLCA’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 Vmware, Inc. (NYSE:VMW) is predicted at 11.23% while U.S. Silica Holdings, Inc. (NYSE:SLCA) stands at 0%. These numbers suggest that VMW 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 VMW stands at 3 while SLCA is at 2.9 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.93.
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 VMW and 2.1 for SLCA which means VMW has Hold rating whereas SLCA 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 VMW is $163 which is 8.67% of its current price while SLCA has price target of 31.29 which is 34.39% 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.
VMW currently has price to earning P/E ratio of 23.94 whereas SLCA has 13.15 while the forward P/E ratio for the prior stands at 22.54 and for the later it depicts the value of 9.26.
The price to Book P/B for VMW is 5.83, Price to Sale is at 7.14 and for SLCA these ratios stand at 1.18 and 1.1.