The shares of KKR & Co. L.P. (NYSE:KKR) and Union Pacific Corporation (NYSE:UNP) were among the active stocks of the last trading sessions. KKR & Co. L.P. (NYSE:KKR) declined to -0.7% closing at the price of $24.25 whereas the shares of Union Pacific Corporation (NYSE:UNP) declined -1.53% with the decrease of -2.37 points closing at the price of $152.09. KKR & Co. L.P. has currently increase 19.28% in its stock over the period of 6-months while its rival Union Pacific Corporation added 13.23% 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 KKR & Co. L.P. (NYSE:KKR) is 2.9% while the ROI of Union Pacific Corporation (NYSE:UNP) is 12.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, KKR’s EBITDA Margin is NOT AVAILABLE whereas UNP’s is 13.48.
Both the profitability ratios suggest a mixed sentiment for KKR & Co. L.P. (NYSE:KKR) and Union Pacific Corporation (NYSE:UNP).
EPS & Surprise Factor
KKR & Co. L.P. (NYSE:KKR) reported $0.49/share EPS for the previous quarter where analysts were predicting an EPS to be $0.44/share Thus beating the analyst Estimates with a Surprise Factor of 11.4 Percent. While, Union Pacific Corporation (NYSE:UNP) reported EPS of $1.98/share in the last quarter. The analysts projected EPS of $1.95/share depicting a Surprise of 1.5 Percent.
Taking a look at Earnings per Share, KKR & Co. L.P. tends to be beating the analyst estimates more than Union Pacific Corporation. so KKR is more profitable than UNP.
Technical Analysis of KKR & Co. L.P. & Union Pacific Corporation
Moving average convergence divergence (MACD) shows that KKR & Co. L.P. (NYSE:KKR) is on a PRICE RELATIVITY trend While Union Pacific Corporation (NYSE:UNP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the KKR & Co. L.P. was in BEARISH territory and Union Pacific Corporation was in BEARISH territory.
KKR’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While UNP’s candle is BEARISH with HIGH.
EPS Growth Rate: KKR’s 4.47% versus UNP’s 18.01%
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 KKR & Co. L.P. (NYSE:KKR) is predicted at 4.47% while Union Pacific Corporation (NYSE:UNP) stands at 18.01%. These numbers suggest that UNP 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 KKR stands at 0 while UNP is at 1 whereas the debt ratio of the prior is 2.53 while the debt ratio of the later is 1.15.
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 1.8 for KKR and 2.3 for UNP which means KKR has Buy rating whereas UNP 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 KKR is $32.08 which is 24.41% of its current price while UNP has price target of 166.84 which is 8.84% 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.
KKR currently has price to earning P/E ratio of 10.24 whereas UNP has 21.88 while the forward P/E ratio for the prior stands at 12.93 and for the later it depicts the value of 17.19.
The price to Book P/B for KKR is 1.57, Price to Sale is at 6.71 and for UNP these ratios stand at 5.81 and 5.13.