The shares of Parsley Energy, Inc. (NYSE:PE) and Energy Transfer Partners, L.P. (NYSE:ETP) were among the active stocks of the last trading sessions. Parsley Energy, Inc. (NYSE:PE) soared to 2.33% closing at the price of $30.7 whereas the shares of Energy Transfer Partners, L.P. (NYSE:ETP) soared 0.59% with the increase of 0.13 points closing at the price of $22.23. Parsley Energy, Inc. has currently increase 9.37% in its stock over the period of 6-months while its rival Energy Transfer Partners, L.P. added 29.7% 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 Parsley Energy, Inc. (NYSE:PE) is 3.7% while the ROI of Energy Transfer Partners, L.P. (NYSE:ETP) is 3.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PE’s EBITDA Margin is 12.52 whereas ETP’s is 10.93.
Both the profitability ratios suggest that Parsley Energy, Inc. (NYSE:PE) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Parsley Energy, Inc. (NYSE:PE) reported $0.39/share EPS for the previous quarter where analysts were predicting an EPS to be $0.4/share Thus lagging the analyst Estimates with a Surprise Factor of -2.5 Percent. While, Energy Transfer Partners, L.P. (NYSE:ETP) reported EPS of $-0.01/share in the last quarter. The analysts projected EPS of $0.2/share depicting a Surprise of -105 Percent.
Taking a look at Earnings per Share, Parsley Energy, Inc. tends to be beating the analyst estimates more than Energy Transfer Partners, L.P.. so PE is more profitable than ETP.
Technical Analysis of Parsley Energy, Inc. & Energy Transfer Partners, L.P.
Moving average convergence divergence (MACD) shows that Parsley Energy, Inc. (NYSE:PE) is on a PRICE RELATIVITY trend While Energy Transfer Partners, L.P. (NYSE:ETP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Parsley Energy, Inc. was in BULLISH territory and Energy Transfer Partners, L.P. was in BULLISH territory.
PE’s current statistics gauge that the stock candle is BULLISH with LOW volatility. While ETP’s candle is BULLISH with MEDIUM.
EPS Growth Rate: PE’s 59.2% versus ETP’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 Parsley Energy, Inc. (NYSE:PE) is predicted at 59.2% while Energy Transfer Partners, L.P. (NYSE:ETP) stands at 0%. These numbers suggest that PE 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 PE stands at 0.9 while ETP is at 1 whereas the debt ratio of the prior is 0.41 while the debt ratio of the later is 1.33.
The values of the both ratios suggest that ETP 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 1.9 for PE and 1.6 for ETP which means PE has Buy rating whereas ETP has Buy 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 PE is $41.87 which is 26.68% of its current price while ETP has price target of 26.65 which is 16.59% 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.
PE currently has price to earning P/E ratio of 31.71 whereas ETP has 0 while the forward P/E ratio for the prior stands at 13.9 and for the later it depicts the value of 13.55.
The price to Book P/B for PE is 1.56, Price to Sale is at 6.81 and for ETP these ratios stand at 1.01 and 0.78.