The shares of Deutsche Bank AG (NYSE:DB) and State Street Corporation (NYSE:STT) were among the active stocks of the last trading sessions. Deutsche Bank AG (NYSE:DB) declined to -0.18% closing at the price of $11.03 whereas the shares of State Street Corporation (NYSE:STT) declined -0.9% with the decrease of -0.78 points closing at the price of $86.36. Deutsche Bank AG has currently decrease -22.27% in its stock over the period of 6-months while its rival State Street Corporation subtracted -12.44% 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 Deutsche Bank AG (NYSE:DB) is 2.6% while the ROI of State Street Corporation (NYSE:STT) is 5.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DB’s EBITDA Margin is NOT AVAILABLE whereas STT’s is NOT AVAILABLE.
Both the profitability ratios suggest a mixed sentiment for Deutsche Bank AG (NYSE:DB) and State Street Corporation (NYSE:STT).
EPS & Surprise Factor
Deutsche Bank AG (NYSE:DB) reported $0.3/share EPS for the previous quarter where analysts were predicting an EPS to be $0.24/share Thus beating the analyst Estimates with a Surprise Factor of 25 Percent. While, State Street Corporation (NYSE:STT) reported EPS of $2.05/share in the last quarter. The analysts projected EPS of $2.01/share depicting a Surprise of 2 Percent.
Taking a look at Earnings per Share, Deutsche Bank AG tends to be beating the analyst estimates more than State Street Corporation. so DB is more profitable than STT.
Technical Analysis of Deutsche Bank AG & State Street Corporation
Moving average convergence divergence (MACD) shows that Deutsche Bank AG (NYSE:DB) is on a PRICE RELATIVITY trend While State Street Corporation (NYSE:STT) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Deutsche Bank AG was in BEARISH territory and State Street Corporation was in BULLISH territory.
DB’s current statistics gauge that the stock candle is BULLISH with LOW volatility. While STT’s candle is BEARISH with MEDIUM.
EPS Growth Rate: DB’s 13.47% versus STT’s 11.48%
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 Deutsche Bank AG (NYSE:DB) is predicted at 13.47% while State Street Corporation (NYSE:STT) stands at 11.48%. These numbers suggest that DB 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 DB stands at 0 while STT is at 0 whereas the debt ratio of the prior is 2.48 while the debt ratio of the later is 0.75.
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 4 for DB and 2.3 for STT which means DB has Sell rating whereas STT 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 DB is $10.4 which is -6.06% of its current price while STT has price target of 103.31 which is 16.41% 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.
DB currently has price to earning P/E ratio of 0 whereas STT has 12.81 while the forward P/E ratio for the prior stands at 10.48 and for the later it depicts the value of 10.56.
The price to Book P/B for DB is 0.3, Price to Sale is at 0.79 and for STT these ratios stand at 1.63 and 9.9.