The shares of Dollar General Corporation (NYSE:DG) and First BanCorp. (NYSE:FBP) were among the active stocks of the last trading sessions. Dollar General Corporation (NYSE:DG) declined to -0.24% closing at the price of $105.1 whereas the shares of First BanCorp. (NYSE:FBP) soared 1.09% with the increase of 0.1 points closing at the price of $9.24. Dollar General Corporation has currently increase 9.17% in its stock over the period of 6-months while its rival First BanCorp. added 43.7% 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 Dollar General Corporation (NYSE:DG) is 14.6% while the ROI of First BanCorp. (NYSE:FBP) is 17.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DG’s EBITDA Margin is 11.97 whereas FBP’s is NOT AVAILABLE.
Both the profitability ratios suggest that First BanCorp. (NYSE:FBP) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Dollar General Corporation (NYSE:DG) reported $1.52/share EPS for the previous quarter where analysts were predicting an EPS to be $1.49/share Thus beating the analyst Estimates with a Surprise Factor of 2 Percent. While, First BanCorp. (NYSE:FBP) reported EPS of $0.14/share in the last quarter. The analysts projected EPS of $0.13/share depicting a Surprise of 7.7 Percent.
Taking a look at Earnings per Share, First BanCorp. tends to be beating the analyst estimates more than Dollar General Corporation. so FBP is more profitable than DG.
Technical Analysis of Dollar General Corporation & First BanCorp.
Moving average convergence divergence (MACD) shows that Dollar General Corporation (NYSE:DG) is on a PRICE RELATIVITY trend While First BanCorp. (NYSE:FBP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Dollar General Corporation was in BEARISH territory and First BanCorp. was in BULLISH territory.
DG’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While FBP’s candle is BULLISH with LOW.
EPS Growth Rate: DG’s 15.13% versus FBP’s 35%
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 Dollar General Corporation (NYSE:DG) is predicted at 15.13% while First BanCorp. (NYSE:FBP) stands at 35%. These numbers suggest that FBP 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 DG stands at 1.5 while FBP is at 0 whereas the debt ratio of the prior is 0.44 while the debt ratio of the later is 0.1.
The values of the both ratios suggest that DG 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 2.1 for DG and 1.5 for FBP which means DG has Hold rating whereas FBP 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 DG is $115.96 which is 9.37% of its current price while FBP has price target of 10.13 which is 8.79% 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.
DG currently has price to earning P/E ratio of 19.89 whereas FBP has 26.71 while the forward P/E ratio for the prior stands at 15.59 and for the later it depicts the value of 14.11.
The price to Book P/B for DG is 4.39, Price to Sale is at 1.14 and for FBP these ratios stand at 1.07 and 3.37.