The shares of Vodafone Group Plc (NASDAQ:VOD) and TAL Education Group (NYSE:TAL) were among the active stocks of the last trading sessions. Vodafone Group Plc (NASDAQ:VOD) declined to -0.65% closing at the price of $19.95 whereas the shares of TAL Education Group (NYSE:TAL) declined -2.36% with the decrease of -0.52 points closing at the price of $21.48. Vodafone Group Plc has currently decrease -32.99% in its stock over the period of 6-months while its rival TAL Education Group subtracted -40.86% 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 Vodafone Group Plc (NASDAQ:VOD) is 4.8% while the ROI of TAL Education Group (NYSE:TAL) is 8.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, VOD’s EBITDA Margin is 6.62 whereas TAL’s is 36.13.
Both the profitability ratios suggest that TAL Education Group (NYSE:TAL) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Technical Analysis of Vodafone Group Plc & TAL Education Group
Moving average convergence divergence (MACD) shows that Vodafone Group Plc (NASDAQ:VOD) is on a PRICE RELATIVITY trend While TAL Education Group (NYSE:TAL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Vodafone Group Plc was in BEARISH territory and TAL Education Group was in BEARISH territory.
VOD’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While TAL’s candle is BEARISH with HIGH.
EPS Growth Rate: VOD’s 18.5% versus TAL’s 44.89%
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 Vodafone Group Plc (NASDAQ:VOD) is predicted at 18.5% while TAL Education Group (NYSE:TAL) stands at 44.89%. These numbers suggest that TAL 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 VOD stands at 0 while TAL is at 1.3 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.13.
The values of the both ratios suggest that TAL 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 VOD and 2.2 for TAL which means VOD has Buy rating whereas TAL 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 VOD is $25.83 which is 22.76% of its current price while TAL has price target of 39.59 which is 45.74% 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.
VOD currently has price to earning P/E ratio of 10.91 whereas TAL has 51.63 while the forward P/E ratio for the prior stands at 29.47 and for the later it depicts the value of 28.41.
The price to Book P/B for VOD is 0.68, Price to Sale is at 1 and for TAL these ratios stand at 6.78 and 6.42.