Which Stock will you hold for a while? Pacific Gas & Electric Co. (PCG) or Novavax, Inc. (NVAX)

The shares of Pacific Gas & Electric Co. (NYSE:PCG) and Novavax, Inc. (NASDAQ:NVAX) were among the active stocks of the last trading sessions. Pacific Gas & Electric Co. (NYSE:PCG) declined to -2.16% closing at the price of $46.62 whereas the shares of Novavax, Inc. (NASDAQ:NVAX) declined -0.52% with the decrease of -0.01 points closing at the price of $1.91. Pacific Gas & Electric Co. has currently increase 2.82% in its stock over the period of 6-months while its rival Novavax, Inc. added 5.23% 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 Pacific Gas & Electric Co. (NYSE:PCG) is 6.8% while the ROI of Novavax, Inc. (NASDAQ:NVAX) is -79.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PCG’s EBITDA Margin is 7.75 whereas NVAX’s is -5.71.

Both the profitability ratios suggest that Pacific Gas & Electric Co. (NYSE:PCG) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Pacific Gas & Electric Co. (NYSE:PCG) reported $1.16/share EPS for the previous quarter where analysts were predicting an EPS to be $0.94/share Thus beating the analyst Estimates with a Surprise Factor of 23.4 Percent. While, Novavax, Inc. (NASDAQ:NVAX) reported EPS of $-0.12/share in the last quarter. The analysts projected EPS of $-0.12/share depicting a Surprise of 0 Percent.

Taking a look at Earnings per Share, Pacific Gas & Electric Co. tends to be beating the analyst estimates more than Novavax, Inc.. so PCG is more profitable than NVAX.

Technical Analysis of Pacific Gas & Electric Co. & Novavax, Inc.

Moving average convergence divergence (MACD) shows that Pacific Gas & Electric Co. (NYSE:PCG) is on a PRICE RELATIVITY trend While Novavax, Inc. (NASDAQ:NVAX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Pacific Gas & Electric Co. was in BULLISH territory and Novavax, Inc. was in BULLISH territory.

PCG’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While NVAX’s candle is BEARISH with MEDIUM.

EPS Growth Rate: PCG’s 3.3% versus NVAX’s 0%

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 Pacific Gas & Electric Co. (NYSE:PCG) is predicted at 3.3% while Novavax, Inc. (NASDAQ:NVAX) stands at 0%. These numbers suggest that PCG 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 PCG stands at 0.7 while NVAX is at 4.5 whereas the debt ratio of the prior is 1.02 while the debt ratio of the later is 0.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

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 2.3 for PCG and 2.1 for NVAX which means PCG has Hold rating whereas NVAX 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 PCG is $52.36 which is 10.96% of its current price while NVAX has price target of 3.67 which is 47.96% 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.

PCG currently has price to earning P/E ratio of 89.31 whereas NVAX has 0 while the forward P/E ratio for the prior stands at 11.59 and for the later it depicts the value of 0.

The price to Book P/B for PCG is 1.28, Price to Sale is at 1.4 and for NVAX these ratios stand at 0 and 19.