The shares of Mobile TeleSystems OJSC (NYSE:MBT) and Realty Income Corporation (NYSE:O) were among the active stocks of the last trading sessions. Mobile TeleSystems OJSC (NYSE:MBT) declined to -1.24% closing at the price of $7.99 whereas the shares of Realty Income Corporation (NYSE:O) soared 0.84% with the increase of 0.49 points closing at the price of $58.57. Mobile TeleSystems OJSC has currently decrease -19.21% in its stock over the period of 6-months while its rival Realty Income Corporation added 13% 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 Mobile TeleSystems OJSC (NYSE:MBT) is 18.2% while the ROI of Realty Income Corporation (NYSE:O) is 2.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MBT’s EBITDA Margin is 3.55 whereas O’s is 20.37.
Both the profitability ratios suggest a mixed sentiment for Mobile TeleSystems OJSC (NYSE:MBT) and Realty Income Corporation (NYSE:O).
EPS & Surprise Factor
Mobile TeleSystems OJSC (NYSE:MBT) reported $0.23/share EPS for the previous quarter where analysts were predicting an EPS to be $0.25/share Thus lagging the analyst Estimates with a Surprise Factor of -8 Percent. While, Realty Income Corporation (NYSE:O) reported EPS of $0.34/share in the last quarter. The analysts projected EPS of $0.32/share depicting a Surprise of 6.3 Percent.
Taking a look at Earnings per Share, Realty Income Corporation tends to be beating the analyst estimates more than Mobile TeleSystems OJSC. so O is more profitable than MBT.
Technical Analysis of Mobile TeleSystems OJSC & Realty Income Corporation
Moving average convergence divergence (MACD) shows that Mobile TeleSystems OJSC (NYSE:MBT) is on a PRICE RELATIVITY trend While Realty Income Corporation (NYSE:O) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Mobile TeleSystems OJSC was in BEARISH territory and Realty Income Corporation was in BULLISH territory.
MBT’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While O’s candle is BULLISH with HIGH.
EPS Growth Rate: MBT’s 0.16% versus O’s 7.8%
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 Mobile TeleSystems OJSC (NYSE:MBT) is predicted at 0.16% while Realty Income Corporation (NYSE:O) stands at 7.8%. These numbers suggest that O 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 MBT stands at 0.9 while O is at 0 whereas the debt ratio of the prior is 4.28 while the debt ratio of the later is 0.88.
The values of the both ratios suggest that MBT 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 for MBT and 2.8 for O which means MBT has Buy rating whereas O 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 MBT is $11.11 which is 28.08% of its current price while O has price target of 58.71 which is 0.24% 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.
MBT currently has price to earning P/E ratio of 8.85 whereas O has 50.32 while the forward P/E ratio for the prior stands at 7.9 and for the later it depicts the value of 43.91.
The price to Book P/B for MBT is 4.7, Price to Sale is at 1.18 and for O these ratios stand at 2.23 and 13.31.