The shares of Marathon Oil Corporation (NYSE:MRO) and Morgan Stanley (NYSE:MS) were among the active stocks of the last trading sessions. Marathon Oil Corporation (NYSE:MRO) declined to -5.67% closing at the price of $19.96 whereas the shares of Morgan Stanley (NYSE:MS) declined -2.53% with the decrease of -1.13 points closing at the price of $43.49. Marathon Oil Corporation has currently increase 9.91% in its stock over the period of 6-months while its rival Morgan Stanley subtracted -17.91% 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 Marathon Oil Corporation (NYSE:MRO) is -3.5% while the ROI of Morgan Stanley (NYSE:MS) is 1.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MRO’s EBITDA Margin is 7.97 whereas MS’s is NOT AVAILABLE.
Both the profitability ratios suggest that Morgan Stanley (NYSE:MS) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Marathon Oil Corporation (NYSE:MRO) reported $0.15/share EPS for the previous quarter where analysts were predicting an EPS to be $0.2/share Thus lagging the analyst Estimates with a Surprise Factor of -25 Percent. While, Morgan Stanley (NYSE:MS) reported EPS of $1.3/share in the last quarter. The analysts projected EPS of $1.11/share depicting a Surprise of 17.1 Percent.
Taking a look at Earnings per Share, Morgan Stanley tends to be beating the analyst estimates more than Marathon Oil Corporation. so MS is more profitable than MRO.
Technical Analysis of Marathon Oil Corporation & Morgan Stanley
Moving average convergence divergence (MACD) shows that Marathon Oil Corporation (NYSE:MRO) is on a PRICE RELATIVITY trend While Morgan Stanley (NYSE:MS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Marathon Oil Corporation was in BEARISH territory and Morgan Stanley was in BEARISH territory.
MRO’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While MS’s candle is BEARISH with HIGH.
EPS Growth Rate: MRO’s 0% versus MS’s 16.9%
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 Marathon Oil Corporation (NYSE:MRO) is predicted at 0% while Morgan Stanley (NYSE:MS) stands at 16.9%. These numbers suggest that MS 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 MRO stands at 1.5 while MS is at 0 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 5.89.
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 2.2 for MRO and 2.2 for MS which means MRO has Hold rating whereas MS 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 MRO is $24.34 which is 18% of its current price while MS has price target of 59.15 which is 26.48% 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.
MRO currently has price to earning P/E ratio of 0 whereas MS has 9.71 while the forward P/E ratio for the prior stands at 16.43 and for the later it depicts the value of 8.45.
The price to Book P/B for MRO is 1.4, Price to Sale is at 3.18 and for MS these ratios stand at 1.06 and 1.6.