Performance Comparison of Credit Suisse Group (CS) and Lennar Corporation (LEN)

The shares of Credit Suisse Group (NYSE:CS) and Lennar Corporation (NYSE:LEN) were among the active stocks of the last trading sessions. Credit Suisse Group (NYSE:CS) declined to -2.47% closing at the price of $13.42 whereas the shares of Lennar Corporation (NYSE:LEN) declined -0.94% with the decrease of -0.41 points closing at the price of $43.31. Credit Suisse Group has currently decrease -16.71% in its stock over the period of 6-months while its rival Lennar Corporation subtracted -23.94% 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 Credit Suisse Group (NYSE:CS) is 2.7% while the ROI of Lennar Corporation (NYSE:LEN) is 4.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CS’s EBITDA Margin is NOT AVAILABLE whereas LEN’s is 14.17.

Both the profitability ratios suggest a mixed sentiment for Credit Suisse Group (NYSE:CS) and Lennar Corporation (NYSE:LEN).

EPS & Surprise Factor
Technical Analysis of Credit Suisse Group & Lennar Corporation

Moving average convergence divergence (MACD) shows that Credit Suisse Group (NYSE:CS) is on a PRICE RELATIVITY trend While Lennar Corporation (NYSE:LEN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Credit Suisse Group was in BEARISH territory and Lennar Corporation was in BEARISH territory.

CS’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While LEN’s candle is BEARISH with HIGH.

EPS Growth Rate: CS’s 58.5% versus LEN’s 23.97%

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 Credit Suisse Group (NYSE:CS) is predicted at 58.5% while Lennar Corporation (NYSE:LEN) stands at 23.97%. These numbers suggest that CS 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 CS stands at 0 while LEN is at 0 whereas the debt ratio of the prior is 3.82 while the debt ratio of the later is 0.83.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

Analyst Recommendations

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 1 for CS and 1.9 for LEN which means CS has Strong Buy rating whereas LEN 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 CS is $21.35 which is 37.14% of its current price while LEN has price target of 64.41 which is 32.76% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

CS currently has price to earning P/E ratio of 19.91 whereas LEN has 11.17 while the forward P/E ratio for the prior stands at 8.02 and for the later it depicts the value of 6.46.

The price to Book P/B for CS is 0.79, Price to Sale is at 1.92 and for LEN these ratios stand at 1.04 and 0.9.