Which Stock will give you a Nice Return? World Wrestling Entertainment, Inc. (WWE) or Sprouts Farmers Market, Inc. (SFM)

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The shares of World Wrestling Entertainment, Inc. (NYSE:WWE) and Sprouts Farmers Market, Inc. (NASDAQ:SFM) were among the active stocks of the last trading sessions. World Wrestling Entertainment, Inc. (NYSE:WWE) declined to -4.14% closing at the price of $86.99 whereas the shares of Sprouts Farmers Market, Inc. (NASDAQ:SFM) declined -0.41% with the decrease of -0.11 points closing at the price of $26.73. World Wrestling Entertainment, Inc. has currently increase 125.89% in its stock over the period of 6-months while its rival Sprouts Farmers Market, Inc. added 12.26% 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 World Wrestling Entertainment, Inc. (NYSE:WWE) is 11.9% while the ROI of Sprouts Farmers Market, Inc. (NASDAQ:SFM) is 14.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WWE’s EBITDA Margin is 51.63 whereas SFM’s is 11.84.

Both the profitability ratios suggest a mixed sentiment for World Wrestling Entertainment, Inc. (NYSE:WWE) and Sprouts Farmers Market, Inc. (NASDAQ:SFM).

EPS & Surprise Factor

World Wrestling Entertainment, Inc. (NYSE:WWE) reported $0.11/share EPS for the previous quarter where analysts were predicting an EPS to be $0.16/share Thus lagging the analyst Estimates with a Surprise Factor of -31.2 Percent. While, Sprouts Farmers Market, Inc. (NASDAQ:SFM) reported EPS of $0.32/share in the last quarter. The analysts projected EPS of $0.32/share depicting a Surprise of 0 Percent.

Taking a look at Earnings per Share, Sprouts Farmers Market, Inc. tends to be beating the analyst estimates more than World Wrestling Entertainment, Inc.. so SFM is more profitable than WWE.

Technical Analysis of World Wrestling Entertainment, Inc. & Sprouts Farmers Market, Inc.

Moving average convergence divergence (MACD) shows that World Wrestling Entertainment, Inc. (NYSE:WWE) is on a PRICE RELATIVITY trend While Sprouts Farmers Market, Inc. (NASDAQ:SFM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the World Wrestling Entertainment, Inc. was in BEARISH territory and Sprouts Farmers Market, Inc. was in BEARISH territory.

WWE’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While SFM’s candle is BEARISH with MEDIUM.

EPS Growth Rate: WWE’s 74.5% versus SFM’s 14.74%

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 World Wrestling Entertainment, Inc. (NYSE:WWE) is predicted at 74.5% while Sprouts Farmers Market, Inc. (NASDAQ:SFM) stands at 14.74%. These numbers suggest that WWE 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 WWE stands at 1.3 while SFM is at 1 whereas the debt ratio of the prior is 0.73 while the debt ratio of the later is 0.99.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

Analyst Recommendations

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 2.3 for WWE and 2.4 for SFM which means WWE has Hold rating whereas SFM 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 WWE is $88.78 which is 2.02% of its current price while SFM has price target of 28.11 which is 4.91% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

WWE currently has price to earning P/E ratio of 111.96 whereas SFM has 22.18 while the forward P/E ratio for the prior stands at 65.16 and for the later it depicts the value of 19.29.

The price to Book P/B for WWE is 22.89, Price to Sale is at 7.77 and for SFM these ratios stand at 5.75 and 0.67.