The shares of ConocoPhillips (NYSE:COP) and Mastercard Incorporated (NYSE:MA) were among the active stocks of the last trading sessions. ConocoPhillips (NYSE:COP) declined to -3.06% closing at the price of $72.79 whereas the shares of Mastercard Incorporated (NYSE:MA) declined -1.11% with the decrease of -2.18 points closing at the price of $194.51. ConocoPhillips has currently increase 12.16% in its stock over the period of 6-months while its rival Mastercard Incorporated added 11.61% 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 ConocoPhillips (NYSE:COP) is -2.6% while the ROI of Mastercard Incorporated (NYSE:MA) is 44%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, COP’s EBITDA Margin is 8.02 whereas MA’s is 26.76.
Both the profitability ratios suggest that Mastercard Incorporated (NYSE:MA) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
ConocoPhillips (NYSE:COP) reported $1.09/share EPS for the previous quarter where analysts were predicting an EPS to be $1.08/share Thus beating the analyst Estimates with a Surprise Factor of 0.9 Percent. While, Mastercard Incorporated (NYSE:MA) reported EPS of $1.66/share in the last quarter. The analysts projected EPS of $1.53/share depicting a Surprise of 8.5 Percent.
Taking a look at Earnings per Share, Mastercard Incorporated tends to be beating the analyst estimates more than ConocoPhillips. so MA is more profitable than COP.
Technical Analysis of ConocoPhillips & Mastercard Incorporated
Moving average convergence divergence (MACD) shows that ConocoPhillips (NYSE:COP) is on a PRICE RELATIVITY trend While Mastercard Incorporated (NYSE:MA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the ConocoPhillips was in BEARISH territory and Mastercard Incorporated was in BEARISH territory.
COP’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While MA’s candle is BEARISH with HIGH.
EPS Growth Rate: COP’s 0% versus MA’s 22.57%
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 ConocoPhillips (NYSE:COP) is predicted at 0% while Mastercard Incorporated (NYSE:MA) stands at 22.57%. These numbers suggest that MA 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 COP stands at 1.7 while MA is at 1.5 whereas the debt ratio of the prior is 0.48 while the debt ratio of the later is 1.11.
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 2.4 for COP and 1.7 for MA which means COP has Hold rating whereas MA 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 COP is $81.95 which is 11.18% of its current price while MA has price target of 232.03 which is 16.17% 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.
COP currently has price to earning P/E ratio of 23.54 whereas MA has 37.47 while the forward P/E ratio for the prior stands at 13.75 and for the later it depicts the value of 25.92.
The price to Book P/B for COP is 2.75, Price to Sale is at 2.59 and for MA these ratios stand at 38.59 and 14.67.