The shares of SM Energy Company (NYSE:SM) and TD Ameritrade Holding Corporation (NASDAQ:AMTD) were among the active stocks of the last trading sessions. SM Energy Company (NYSE:SM) declined to -4.35% closing at the price of $28.79 whereas the shares of TD Ameritrade Holding Corporation (NASDAQ:AMTD) declined -2.03% with the decrease of -1.03 points closing at the price of $49.77. SM Energy Company has currently increase 38.41% in its stock over the period of 6-months while its rival TD Ameritrade Holding Corporation subtracted -16.42% 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 SM Energy Company (NYSE:SM) is -0.9% while the ROI of TD Ameritrade Holding Corporation (NASDAQ:AMTD) is 9.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SM’s EBITDA Margin is 12.34 whereas AMTD’s is NOT AVAILABLE.
Both the profitability ratios suggest that TD Ameritrade Holding Corporation (NASDAQ:AMTD) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
SM Energy Company (NYSE:SM) reported $0.15/share EPS for the previous quarter where analysts were predicting an EPS to be $0.08/share Thus beating the analyst Estimates with a Surprise Factor of 87.5 Percent. While, TD Ameritrade Holding Corporation (NASDAQ:AMTD) reported EPS of $0.89/share in the last quarter. The analysts projected EPS of $0.79/share depicting a Surprise of 12.7 Percent.
Taking a look at Earnings per Share, SM Energy Company tends to be beating the analyst estimates more than TD Ameritrade Holding Corporation. so SM is more profitable than AMTD.
Technical Analysis of SM Energy Company & TD Ameritrade Holding Corporation
Moving average convergence divergence (MACD) shows that SM Energy Company (NYSE:SM) is on a PRICE RELATIVITY trend While TD Ameritrade Holding Corporation (NASDAQ:AMTD) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the SM Energy Company was in BEARISH territory and TD Ameritrade Holding Corporation was in BEARISH territory.
SM’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While AMTD’s candle is BEARISH with HIGH.
EPS Growth Rate: SM’s 0% versus AMTD’s 30.93%
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 SM Energy Company (NYSE:SM) is predicted at 0% while TD Ameritrade Holding Corporation (NASDAQ:AMTD) stands at 30.93%. These numbers suggest that AMTD 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 SM stands at 0.9 while AMTD is at 0 whereas the debt ratio of the prior is 1.07 while the debt ratio of the later is 0.32.
The values of the both ratios suggest that SM 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 2.3 for SM and 2.2 for AMTD which means SM has Hold rating whereas AMTD 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 SM is $34.47 which is 16.48% of its current price while AMTD has price target of 66.83 which is 25.53% 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.
SM currently has price to earning P/E ratio of 21.18 whereas AMTD has 24.17 while the forward P/E ratio for the prior stands at 15.71 and for the later it depicts the value of 12.62.
The price to Book P/B for SM is 1.18, Price to Sale is at 2.25 and for AMTD these ratios stand at 3.56 and 5.64.