The shares of Nielsen N.V. (NYSE:NLSN) and DSW Inc. (NYSE:DSW) were among the active stocks of the last trading sessions. Nielsen N.V. (NYSE:NLSN) declined to -2.13% closing at the price of $25.75 whereas the shares of DSW Inc. (NYSE:DSW) declined -3.37% with the decrease of -0.96 points closing at the price of $27.55. Nielsen N.V. has currently decrease -20.38% in its stock over the period of 6-months while its rival DSW Inc. added 26.9% 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 Nielsen N.V. (NYSE:NLSN) is 7.4% while the ROI of DSW Inc. (NYSE:DSW) is 7.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NLSN’s EBITDA Margin is 10.89 whereas DSW’s is 8.26.
Both the profitability ratios suggest a mixed sentiment for Nielsen N.V. (NYSE:NLSN) and DSW Inc. (NYSE:DSW).
EPS & Surprise Factor
Nielsen N.V. (NYSE:NLSN) reported $0.2/share EPS for the previous quarter where analysts were predicting an EPS to be $0.37/share Thus lagging the analyst Estimates with a Surprise Factor of -45.9 Percent. While, DSW Inc. (NYSE:DSW) reported EPS of $0.63/share in the last quarter. The analysts projected EPS of $0.46/share depicting a Surprise of 37 Percent.
Taking a look at Earnings per Share, DSW Inc. tends to be beating the analyst estimates more than Nielsen N.V.. so DSW is more profitable than NLSN.
Technical Analysis of Nielsen N.V. & DSW Inc.
Moving average convergence divergence (MACD) shows that Nielsen N.V. (NYSE:NLSN) is on a PRICE RELATIVITY trend While DSW Inc. (NYSE:DSW) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Nielsen N.V. was in BEARISH territory and DSW Inc. was in BEARISH territory.
NLSN’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While DSW’s candle is BEARISH with HIGH.
EPS Growth Rate: NLSN’s 12.4% versus DSW’s 7.98%
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 Nielsen N.V. (NYSE:NLSN) is predicted at 12.4% while DSW Inc. (NYSE:DSW) stands at 7.98%. These numbers suggest that NLSN 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 NLSN stands at 1.2 while DSW is at 2.6 whereas the debt ratio of the prior is 2.14 while the debt ratio of the later is 0.
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 2.1 for NLSN and 2.8 for DSW which means NLSN has Hold rating whereas DSW 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 NLSN is $27.88 which is 7.64% of its current price while DSW has price target of 31.18 which is 11.64% 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.
NLSN currently has price to earning P/E ratio of 19.38 whereas DSW has 192.66 while the forward P/E ratio for the prior stands at 20.36 and for the later it depicts the value of 14.75.
The price to Book P/B for NLSN is 2.26, Price to Sale is at 1.38 and for DSW these ratios stand at 2.4 and 0.77.