The shares of KapStone Paper and Packaging Corporation (NYSE:KS) and Teradyne, Inc. (NYSE:TER) were among the active stocks of the last trading sessions. KapStone Paper and Packaging Corporation (NYSE:KS) declined to -3.8% closing at the price of $32.42 whereas the shares of Teradyne, Inc. (NYSE:TER) declined -1.51% with the decrease of -0.52 points closing at the price of $34. KapStone Paper and Packaging Corporation has currently decrease -6.54% in its stock over the period of 6-months while its rival Teradyne, Inc. subtracted -21.3% 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 KapStone Paper and Packaging Corporation (NYSE:KS) is 5.7% while the ROI of Teradyne, Inc. (NYSE:TER) is 19.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, KS’s EBITDA Margin is 9.69 whereas TER’s is 10.19.
Both the profitability ratios suggest that Teradyne, Inc. (NYSE:TER) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
KapStone Paper and Packaging Corporation (NYSE:KS) reported $0.58/share EPS for the previous quarter where analysts were predicting an EPS to be $0.48/share Thus beating the analyst Estimates with a Surprise Factor of 20.8 Percent. While, Teradyne, Inc. (NYSE:TER) reported EPS of $0.59/share in the last quarter. The analysts projected EPS of $0.49/share depicting a Surprise of 20.4 Percent.
Taking a look at Earnings per Share, KapStone Paper and Packaging Corporation tends to be beating the analyst estimates more than Teradyne, Inc.. so KS is more profitable than TER.
Technical Analysis of KapStone Paper and Packaging Corporation & Teradyne, Inc.
Moving average convergence divergence (MACD) shows that KapStone Paper and Packaging Corporation (NYSE:KS) is on a PRICE RELATIVITY trend While Teradyne, Inc. (NYSE:TER) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the KapStone Paper and Packaging Corporation was in BEARISH territory and Teradyne, Inc. was in BEARISH territory.
KS’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While TER’s candle is BEARISH with HIGH.
EPS Growth Rate: KS’s 25.72% versus TER’s 13.88%
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 KapStone Paper and Packaging Corporation (NYSE:KS) is predicted at 25.72% while Teradyne, Inc. (NYSE:TER) stands at 13.88%. These numbers suggest that KS 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 KS stands at 2.2 while TER is at 4.2 whereas the debt ratio of the prior is 1.24 while the debt ratio of the later is 0.21.
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 3 for KS and 2.2 for TER which means KS has Hold rating whereas TER 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 KS is $33.44 which is 3.05% of its current price while TER has price target of 44.61 which is 23.78% 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.
KS currently has price to earning P/E ratio of 20.52 whereas TER has 18.19 while the forward P/E ratio for the prior stands at 12.62 and for the later it depicts the value of 13.01.
The price to Book P/B for KS is 2.61, Price to Sale is at 0.92 and for TER these ratios stand at 3.73 and 3.26.