The shares of Nike, Inc. (NYSE:NKE) and Invesco Plc (NYSE:IVZ) were among the active stocks of the last trading sessions. Nike, Inc. (NYSE:NKE) declined to -0.57% closing at the price of $74.51 whereas the shares of Invesco Plc (NYSE:IVZ) declined -5.06% with the decrease of -1.07 points closing at the price of $20.07. Nike, Inc. has currently increase 10.8% in its stock over the period of 6-months while its rival Invesco Plc subtracted -34.26% 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 Nike, Inc. (NYSE:NKE) is 30% while the ROI of Invesco Plc (NYSE:IVZ) is 5.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NKE’s EBITDA Margin is 23.26 whereas IVZ’s is 10.54.
Both the profitability ratios suggest that Nike, Inc. (NYSE:NKE) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Nike, Inc. (NYSE:NKE) reported $0.67/share EPS for the previous quarter where analysts were predicting an EPS to be $0.63/share Thus beating the analyst Estimates with a Surprise Factor of 6.3 Percent. While, Invesco Plc (NYSE:IVZ) reported EPS of $0.66/share in the last quarter. The analysts projected EPS of $0.66/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, Nike, Inc. tends to be beating the analyst estimates more than Invesco Plc. so NKE is more profitable than IVZ.
Technical Analysis of Nike, Inc. & Invesco Plc
Moving average convergence divergence (MACD) shows that Nike, Inc. (NYSE:NKE) is on a PRICE RELATIVITY trend While Invesco Plc (NYSE:IVZ) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Nike, Inc. was in BEARISH territory and Invesco Plc was in BEARISH territory.
NKE’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While IVZ’s candle is BEARISH with HIGH.
EPS Growth Rate: NKE’s 13.83% versus IVZ’s 5.75%
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 Nike, Inc. (NYSE:NKE) is predicted at 13.83% while Invesco Plc (NYSE:IVZ) stands at 5.75%. These numbers suggest that NKE 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 NKE stands at 2.5 while IVZ is at 0 whereas the debt ratio of the prior is 0.39 while the debt ratio of the later is 0.9.
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 2.3 for NKE and 2.3 for IVZ which means NKE has Hold rating whereas IVZ 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 NKE is $87.69 which is 15.03% of its current price while IVZ has price target of 30.35 which is 33.87% 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.
NKE currently has price to earning P/E ratio of 29.67 whereas IVZ has 7.91 while the forward P/E ratio for the prior stands at 23.75 and for the later it depicts the value of 7.07.
The price to Book P/B for NKE is 12.19, Price to Sale is at 3.2 and for IVZ these ratios stand at 0.94 and 1.52.