The shares of Westrock Company (NYSE:WRK) and Grifols, S.A. (NASDAQ:GRFS) were among the active stocks of the last trading sessions. Westrock Company (NYSE:WRK) declined to -3.85% closing at the price of $41.95 whereas the shares of Grifols, S.A. (NASDAQ:GRFS) soared 5.4% with the increase of 1.01 points closing at the price of $19.71. Westrock Company has currently decrease -35.46% in its stock over the period of 6-months while its rival Grifols, S.A. subtracted -5.74% 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 Westrock Company (NYSE:WRK) is 4% while the ROI of Grifols, S.A. (NASDAQ:GRFS) is 0%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WRK’s EBITDA Margin is 7.06 whereas GRFS’s is 22.83.
Both the profitability ratios suggest a mixed sentiment for Westrock Company (NYSE:WRK) and Grifols, S.A. (NASDAQ:GRFS).
EPS & Surprise Factor
Westrock Company (NYSE:WRK) reported $1.09/share EPS for the previous quarter where analysts were predicting an EPS to be $1.06/share Thus beating the analyst Estimates with a Surprise Factor of 2.8 Percent. While, Grifols, S.A. (NASDAQ:GRFS) reported EPS of $0.35/share in the last quarter. The analysts projected EPS of $0.31/share depicting a Surprise of 12.9 Percent.
Taking a look at Earnings per Share, Grifols, S.A. tends to be beating the analyst estimates more than Westrock Company. so GRFS is more profitable than WRK.
Technical Analysis of Westrock Company & Grifols, S.A.
Moving average convergence divergence (MACD) shows that Westrock Company (NYSE:WRK) is on a PRICE RELATIVITY trend While Grifols, S.A. (NASDAQ:GRFS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Westrock Company was in BEARISH territory and Grifols, S.A. was in BEARISH territory.
WRK’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While GRFS’s candle is BULLISH with HIGH.
EPS Growth Rate: WRK’s 23.1% versus GRFS’s 11.3%
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 Westrock Company (NYSE:WRK) is predicted at 23.1% while Grifols, S.A. (NASDAQ:GRFS) stands at 11.3%. These numbers suggest that WRK 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 WRK stands at 1.6 while GRFS is at 0 whereas the debt ratio of the prior is 0.57 while the debt ratio of the later is 0.
The values of the both ratios suggest that WRK 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 2.2 for WRK and 2.3 for GRFS which means WRK has Hold rating whereas GRFS 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 WRK is $71.15 which is 41.04% of its current price while GRFS has price target of 22.63 which is 12.9% 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.
WRK currently has price to earning P/E ratio of 15.38 whereas GRFS has 32.9 while the forward P/E ratio for the prior stands at 9.2 and for the later it depicts the value of 14.08.
The price to Book P/B for WRK is 0.94, Price to Sale is at 0.68 and for GRFS these ratios stand at 5.83 and 2.72.