The shares of Accenture plc (NYSE:ACN) and Enterprise Products Partners L.P. (NYSE:EPD) were among the active stocks of the last trading sessions. Accenture plc (NYSE:ACN) declined to -3.55% closing at the price of $156 whereas the shares of Enterprise Products Partners L.P. (NYSE:EPD) declined -0.35% with the decrease of -0.1 points closing at the price of $28.48. Accenture plc has currently increase 3.91% in its stock over the period of 6-months while its rival Enterprise Products Partners L.P. added 12.34% 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 Accenture plc (NYSE:ACN) is 40.7% while the ROI of Enterprise Products Partners L.P. (NYSE:EPD) is 8.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ACN’s EBITDA Margin is 15.39 whereas EPD’s is 16.71.
Both the profitability ratios suggest a mixed sentiment for Accenture plc (NYSE:ACN) and Enterprise Products Partners L.P. (NYSE:EPD).
EPS & Surprise Factor
Accenture plc (NYSE:ACN) reported $1.58/share EPS for the previous quarter where analysts were predicting an EPS to be $1.56/share Thus beating the analyst Estimates with a Surprise Factor of 1.3 Percent. While, Enterprise Products Partners L.P. (NYSE:EPD) reported EPS of $0.31/share in the last quarter. The analysts projected EPS of $0.4/share depicting a Surprise of -22.5 Percent.
Taking a look at Earnings per Share, Accenture plc tends to be beating the analyst estimates more than Enterprise Products Partners L.P.. so ACN is more profitable than EPD.
Technical Analysis of Accenture plc & Enterprise Products Partners L.P.
Moving average convergence divergence (MACD) shows that Accenture plc (NYSE:ACN) is on a PRICE RELATIVITY trend While Enterprise Products Partners L.P. (NYSE:EPD) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Accenture plc was in BEARISH territory and Enterprise Products Partners L.P. was in BEARISH territory.
ACN’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While EPD’s candle is BEARISH with MEDIUM.
EPS Growth Rate: ACN’s 8.37% versus EPD’s 5.3%
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 Accenture plc (NYSE:ACN) is predicted at 8.37% while Enterprise Products Partners L.P. (NYSE:EPD) stands at 5.3%. These numbers suggest that ACN 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 ACN stands at 1.3 while EPD is at 0.7 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.13.
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 2.3 for ACN and 1.4 for EPD which means ACN has Hold rating whereas EPD 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 ACN is $179.32 which is 13% of its current price while EPD has price target of 33.65 which is 15.36% 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.
ACN currently has price to earning P/E ratio of 23.17 whereas EPD has 21.03 while the forward P/E ratio for the prior stands at 19.65 and for the later it depicts the value of 15.91.
The price to Book P/B for ACN is 10.18, Price to Sale is at 2.54 and for EPD these ratios stand at 2.73 and 1.86.