The shares of US Foods Holding Corp. (NYSE:USFD) and Sealed Air Corporation (NYSE:SEE) were among the active stocks of the last trading sessions. US Foods Holding Corp. (NYSE:USFD) declined to -2.75% closing at the price of $28.3 whereas the shares of Sealed Air Corporation (NYSE:SEE) declined -3.29% with the decrease of -1.19 points closing at the price of $34.94. US Foods Holding Corp. has currently decrease -16.49% in its stock over the period of 6-months while its rival Sealed Air Corporation subtracted -20.41% 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 US Foods Holding Corp. (NYSE:USFD) is 6.6% while the ROI of Sealed Air Corporation (NYSE:SEE) is 9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, USFD’s EBITDA Margin is 9.87 whereas SEE’s is 11.84.
Both the profitability ratios suggest that Sealed Air Corporation (NYSE:SEE) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
US Foods Holding Corp. (NYSE:USFD) reported $0.57/share EPS for the previous quarter where analysts were predicting an EPS to be $0.58/share Thus lagging the analyst Estimates with a Surprise Factor of -1.7 Percent. While, Sealed Air Corporation (NYSE:SEE) reported EPS of $0.64/share in the last quarter. The analysts projected EPS of $0.58/share depicting a Surprise of 10.3 Percent.
Taking a look at Earnings per Share, Sealed Air Corporation tends to be beating the analyst estimates more than US Foods Holding Corp.. so SEE is more profitable than USFD.
Technical Analysis of US Foods Holding Corp. & Sealed Air Corporation
Moving average convergence divergence (MACD) shows that US Foods Holding Corp. (NYSE:USFD) is on a PRICE RELATIVITY trend While Sealed Air Corporation (NYSE:SEE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the US Foods Holding Corp. was in BEARISH territory and Sealed Air Corporation was in BEARISH territory.
USFD’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While SEE’s candle is BEARISH with HIGH.
EPS Growth Rate: USFD’s 27.3% versus SEE’s 22.45%
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 US Foods Holding Corp. (NYSE:USFD) is predicted at 27.3% while Sealed Air Corporation (NYSE:SEE) stands at 22.45%. These numbers suggest that USFD 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 USFD stands at 1.4 while SEE is at 1.1 whereas the debt ratio of the prior is 1.24 while the debt ratio of the later is 0.
The values of the both ratios suggest that USFD 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 for USFD and 2.2 for SEE which means USFD has Buy rating whereas SEE 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 USFD is $39.15 which is 27.71% of its current price while SEE has price target of 49.92 which is 30.01% 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.
USFD currently has price to earning P/E ratio of 16.83 whereas SEE has 20.43 while the forward P/E ratio for the prior stands at 12.23 and for the later it depicts the value of 12.22.
The price to Book P/B for USFD is 2.02, Price to Sale is at 0.26 and for SEE these ratios stand at 0 and 1.2.