Which Stock will you hold for a while? Apple Inc. (AAPL) or Petroleo Brasileiro S.A.- Petrobras (PBR)

The shares of Apple Inc. (NASDAQ:AAPL) and Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) were among the active stocks of the last trading sessions. Apple Inc. (NASDAQ:AAPL) declined to -0.88% closing at the price of $214.45 whereas the shares of Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) declined -1.59% with the decrease of -0.24 points closing at the price of $14.86. Apple Inc. has currently increase 22.73% in its stock over the period of 6-months while its rival Petroleo Brasileiro S.A.- Petrobras added 7.66% 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 Apple Inc. (NASDAQ:AAPL) is 18.3% while the ROI of Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) is 5.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AAPL’s EBITDA Margin is 14.35 whereas PBR’s is 6.93.

Both the profitability ratios suggest that Apple Inc. (NASDAQ:AAPL) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Apple Inc. (NASDAQ:AAPL) reported $2.34/share EPS for the previous quarter where analysts were predicting an EPS to be $2.18/share Thus beating the analyst Estimates with a Surprise Factor of 7.3 Percent. While, Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) reported EPS of $0.43/share in the last quarter. The analysts projected EPS of $0.32/share depicting a Surprise of 34.4 Percent.

Taking a look at Earnings per Share, Petroleo Brasileiro S.A.- Petrobras tends to be beating the analyst estimates more than Apple Inc.. so PBR is more profitable than AAPL.

Technical Analysis of Apple Inc. & Petroleo Brasileiro S.A.- Petrobras

Moving average convergence divergence (MACD) shows that Apple Inc. (NASDAQ:AAPL) is on a PRICE RELATIVITY trend While Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Apple Inc. was in BEARISH territory and Petroleo Brasileiro S.A.- Petrobras was in BULLISH territory.

AAPL’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While PBR’s candle is BEARISH with HIGH.

EPS Growth Rate: AAPL’s 10.75% versus PBR’s 24.3%

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 Apple Inc. (NASDAQ:AAPL) is predicted at 10.75% while Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) stands at 24.3%. These numbers suggest that PBR 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 AAPL stands at 1.3 while PBR is at 1.7 whereas the debt ratio of the prior is 1 while the debt ratio of the later is 1.25.

The values of the both ratios suggest that PBR is more suitable investment when the liquidity and risk is the main concern.

Analyst Recommendations

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 AAPL and 2.7 for PBR which means AAPL has Buy rating whereas PBR 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 AAPL is $234.77 which is 8.66% of its current price while PBR has price target of 13.86 which is -7.22% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

AAPL currently has price to earning P/E ratio of 18.61 whereas PBR has 31.75 while the forward P/E ratio for the prior stands at 15.65 and for the later it depicts the value of 8.33.

The price to Book P/B for AAPL is 9.11, Price to Sale is at 4.12 and for PBR these ratios stand at 1.33 and 1.16.