The shares of Devon Energy Corporation (NYSE:DVN) and B2Gold Corp (NYSE:BTG) were among the active stocks of the last trading sessions. Devon Energy Corporation (NYSE:DVN) declined to -3.38% closing at the price of $36.04 whereas the shares of B2Gold Corp (NYSE:BTG) soared 6.17% with the increase of 0.15 points closing at the price of $2.58. Devon Energy Corporation has currently increase 7.26% in its stock over the period of 6-months while its rival B2Gold Corp subtracted -9.47% 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 Devon Energy Corporation (NYSE:DVN) is 9.5% while the ROI of B2Gold Corp (NYSE:BTG) is 0%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DVN’s EBITDA Margin is 10.14 whereas BTG’s is 6.44.
Both the profitability ratios suggest that Devon Energy Corporation (NYSE:DVN) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Technical Analysis of Devon Energy Corporation & B2Gold Corp
Moving average convergence divergence (MACD) shows that Devon Energy Corporation (NYSE:DVN) is on a PRICE RELATIVITY trend While B2Gold Corp (NYSE:BTG) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Devon Energy Corporation was in BEARISH territory and B2Gold Corp was in BULLISH territory.
DVN’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While BTG’s candle is BULLISH with HIGH.
EPS Growth Rate: DVN’s 77.99% versus BTG’s 15.8%
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 Devon Energy Corporation (NYSE:DVN) is predicted at 77.99% while B2Gold Corp (NYSE:BTG) stands at 15.8%. These numbers suggest that DVN 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 DVN stands at 1.6 while BTG is at 0 whereas the debt ratio of the prior is 0.76 while the debt ratio of the later is 0.
The values of the both ratios suggest that DVN 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 DVN and 1.5 for BTG which means DVN has Hold rating whereas BTG 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 DVN is $51.57 which is 30.11% of its current price while BTG has price target of 3.5 which is 26.29% 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.
DVN currently has price to earning P/E ratio of 0 whereas BTG has 25.29 while the forward P/E ratio for the prior stands at 13.32 and for the later it depicts the value of 12.29.
The price to Book P/B for DVN is 2.32, Price to Sale is at 1.59 and for BTG these ratios stand at 1.55 and 2.66.