The shares of Suncor Energy Inc. (NYSE:SU) and Franklin Resources, Inc. (NYSE:BEN) were among the active stocks of the last trading sessions. Suncor Energy Inc. (NYSE:SU) declined to -4.82% closing at the price of $35.56 whereas the shares of Franklin Resources, Inc. (NYSE:BEN) declined -3.55% with the decrease of -1.05 points closing at the price of $28.54. Suncor Energy Inc. has currently decrease -6.1% in its stock over the period of 6-months while its rival Franklin Resources, Inc. subtracted -13.91% 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 Suncor Energy Inc. (NYSE:SU) is 5.1% while the ROI of Franklin Resources, Inc. (NYSE:BEN) is 11%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SU’s EBITDA Margin is 8.21 whereas BEN’s is 4.08.
Both the profitability ratios suggest a mixed sentiment for Suncor Energy Inc. (NYSE:SU) and Franklin Resources, Inc. (NYSE:BEN).
EPS & Surprise Factor
Suncor Energy Inc. (NYSE:SU) reported $0.62/share EPS for the previous quarter where analysts were predicting an EPS to be $0.56/share Thus beating the analyst Estimates with a Surprise Factor of 10.7 Percent. While, Franklin Resources, Inc. (NYSE:BEN) reported EPS of $0.75/share in the last quarter. The analysts projected EPS of $0.75/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, Suncor Energy Inc. tends to be beating the analyst estimates more than Franklin Resources, Inc.. so SU is more profitable than BEN.
Technical Analysis of Suncor Energy Inc. & Franklin Resources, Inc.
Moving average convergence divergence (MACD) shows that Suncor Energy Inc. (NYSE:SU) is on a PRICE RELATIVITY trend While Franklin Resources, Inc. (NYSE:BEN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Suncor Energy Inc. was in BEARISH territory and Franklin Resources, Inc. was in BEARISH territory.
SU’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While BEN’s candle is BEARISH with HIGH.
EPS Growth Rate: SU’s 12.64% versus BEN’s -0.47%
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 Suncor Energy Inc. (NYSE:SU) is predicted at 12.64% while Franklin Resources, Inc. (NYSE:BEN) stands at -0.47%. These numbers suggest that SU 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 SU stands at 0.9 while BEN is at 0 whereas the debt ratio of the prior is 0.4 while the debt ratio of the later is 0.07.
The values of the both ratios suggest that SU 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 SU and 3.4 for BEN which means SU has Buy rating whereas BEN has Sell 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 SU is $42.83 which is 16.97% of its current price while BEN has price target of 32.08 which is 11.03% 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.
SU currently has price to earning P/E ratio of 17.12 whereas BEN has 8.94 while the forward P/E ratio for the prior stands at 11.3 and for the later it depicts the value of 9.35.
The price to Book P/B for SU is 1.65, Price to Sale is at 2.1 and for BEN these ratios stand at 1.54 and 2.35.