The shares of Retail Properties of America, Inc. (NYSE:RPAI) and Zoetis Inc. (NYSE:ZTS) were among the active stocks of the last trading sessions. Retail Properties of America, Inc. (NYSE:RPAI) declined to -0.85% closing at the price of $11.69 whereas the shares of Zoetis Inc. (NYSE:ZTS) declined -2.93% with the decrease of -2.63 points closing at the price of $87. Retail Properties of America, Inc. has currently increase 0.43% in its stock over the period of 6-months while its rival Zoetis Inc. added 4.1% 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 Retail Properties of America, Inc. (NYSE:RPAI) is 1.6% while the ROI of Zoetis Inc. (NYSE:ZTS) is 16%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, RPAI’s EBITDA Margin is 13.75 whereas ZTS’s is NOT AVAILABLE.
Both the profitability ratios suggest that Zoetis Inc. (NYSE:ZTS) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Retail Properties of America, Inc. (NYSE:RPAI) reported $0.05/share EPS for the previous quarter where analysts were predicting an EPS to be $0.06/share Thus lagging the analyst Estimates with a Surprise Factor of -16.7 Percent. While, Zoetis Inc. (NYSE:ZTS) reported EPS of $0.77/share in the last quarter. The analysts projected EPS of $0.7/share depicting a Surprise of 10 Percent.
Taking a look at Earnings per Share, Zoetis Inc. tends to be beating the analyst estimates more than Retail Properties of America, Inc.. so ZTS is more profitable than RPAI.
Technical Analysis of Retail Properties of America, Inc. & Zoetis Inc.
Moving average convergence divergence (MACD) shows that Retail Properties of America, Inc. (NYSE:RPAI) is on a PRICE RELATIVITY trend While Zoetis Inc. (NYSE:ZTS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Retail Properties of America, Inc. was in BEARISH territory and Zoetis Inc. was in BEARISH territory.
RPAI’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While ZTS’s candle is BEARISH with HIGH.
EPS Growth Rate: RPAI’s -4.49% versus ZTS’s 16.46%
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 Retail Properties of America, Inc. (NYSE:RPAI) is predicted at -4.49% while Zoetis Inc. (NYSE:ZTS) stands at 16.46%. These numbers suggest that ZTS 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 RPAI stands at 0 while ZTS is at 4.4 whereas the debt ratio of the prior is 0.82 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 for RPAI and 2.1 for ZTS which means RPAI has Buy rating whereas ZTS 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 RPAI is $14.64 which is 20.15% of its current price while ZTS has price target of 95.09 which is 8.51% 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.
RPAI currently has price to earning P/E ratio of 13.82 whereas ZTS has 31.29 while the forward P/E ratio for the prior stands at 50.17 and for the later it depicts the value of 25.24.
The price to Book P/B for RPAI is 1.37, Price to Sale is at 5.13 and for ZTS these ratios stand at 21.38 and 7.53.