The shares of American Homes 4 Rent (NYSE:AMH) and Pitney Bowes Inc. (NYSE:PBI) were among the active stocks of the last trading sessions. American Homes 4 Rent (NYSE:AMH) declined to -2.83% closing at the price of $20.27 whereas the shares of Pitney Bowes Inc. (NYSE:PBI) declined -0.15% with the decrease of -0.01 points closing at the price of $6.69. American Homes 4 Rent has currently increase 2.68% in its stock over the period of 6-months while its rival Pitney Bowes Inc. subtracted -37.71% 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 American Homes 4 Rent (NYSE:AMH) is 0.9% while the ROI of Pitney Bowes Inc. (NYSE:PBI) is 8.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AMH’s EBITDA Margin is 18.86 whereas PBI’s is 6.43.
Both the profitability ratios suggest a mixed sentiment for American Homes 4 Rent (NYSE:AMH) and Pitney Bowes Inc. (NYSE:PBI).
EPS & Surprise Factor
American Homes 4 Rent (NYSE:AMH) reported $-0.05/share EPS for the previous quarter where analysts were predicting an EPS to be $0.04/share Thus lagging the analyst Estimates with a Surprise Factor of -225 Percent. While, Pitney Bowes Inc. (NYSE:PBI) reported EPS of $0.26/share in the last quarter. The analysts projected EPS of $0.26/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, Pitney Bowes Inc. tends to be beating the analyst estimates more than American Homes 4 Rent. so PBI is more profitable than AMH.
Technical Analysis of American Homes 4 Rent & Pitney Bowes Inc.
Moving average convergence divergence (MACD) shows that American Homes 4 Rent (NYSE:AMH) is on a PRICE RELATIVITY trend While Pitney Bowes Inc. (NYSE:PBI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the American Homes 4 Rent was in BEARISH territory and Pitney Bowes Inc. was in BEARISH territory.
AMH’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While PBI’s candle is BEARISH with HIGH.
EPS Growth Rate: AMH’s 14.4% versus PBI’s 4%
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 American Homes 4 Rent (NYSE:AMH) is predicted at 14.4% while Pitney Bowes Inc. (NYSE:PBI) stands at 4%. These numbers suggest that AMH 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 AMH stands at 0 while PBI is at 1.2 whereas the debt ratio of the prior is 0.52 while the debt ratio of the later is 18.28.
The values of the both ratios suggest that PBI 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 1.9 for AMH and 2.2 for PBI which means AMH has Buy rating whereas PBI 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 AMH is $25.12 which is 19.31% of its current price while PBI has price target of 11.67 which is 42.67% 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.
AMH currently has price to earning P/E ratio of 0 whereas PBI has 6.28 while the forward P/E ratio for the prior stands at 78.57 and for the later it depicts the value of 5.32.
The price to Book P/B for AMH is 1.16, Price to Sale is at 5.94 and for PBI these ratios stand at 6.43 and 0.35.