The shares of Canadian Natural Resources Limited (NYSE:CNQ) and EOG Resources, Inc. (NYSE:EOG) were among the active stocks of the last trading sessions. Canadian Natural Resources Limited (NYSE:CNQ) declined to -3.57% closing at the price of $28.9 whereas the shares of EOG Resources, Inc. (NYSE:EOG) declined -3.83% with the decrease of -4.85 points closing at the price of $121.62. Canadian Natural Resources Limited has currently decrease -17.73% in its stock over the period of 6-months while its rival EOG Resources, Inc. added 9.55% 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 Canadian Natural Resources Limited (NYSE:CNQ) is 3.4% while the ROI of EOG Resources, Inc. (NYSE:EOG) is 2.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CNQ’s EBITDA Margin is 7.55 whereas EOG’s is 12.96.
Both the profitability ratios suggest a mixed sentiment for Canadian Natural Resources Limited (NYSE:CNQ) and EOG Resources, Inc. (NYSE:EOG).
EPS & Surprise Factor
Canadian Natural Resources Limited (NYSE:CNQ) reported $0.36/share EPS for the previous quarter where analysts were predicting an EPS to be $0.28/share Thus beating the analyst Estimates with a Surprise Factor of 28.6 Percent. While, EOG Resources, Inc. (NYSE:EOG) reported EPS of $1.37/share in the last quarter. The analysts projected EPS of $1.23/share depicting a Surprise of 11.4 Percent.
Taking a look at Earnings per Share, Canadian Natural Resources Limited tends to be beating the analyst estimates more than EOG Resources, Inc.. so CNQ is more profitable than EOG.
Technical Analysis of Canadian Natural Resources Limited & EOG Resources, Inc.
Moving average convergence divergence (MACD) shows that Canadian Natural Resources Limited (NYSE:CNQ) is on a PRICE RELATIVITY trend While EOG Resources, Inc. (NYSE:EOG) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Canadian Natural Resources Limited was in BEARISH territory and EOG Resources, Inc. was in BEARISH territory.
CNQ’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While EOG’s candle is BEARISH with HIGH.
EPS Growth Rate: CNQ’s 16.3% versus EOG’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 Canadian Natural Resources Limited (NYSE:CNQ) is predicted at 16.3% while EOG Resources, Inc. (NYSE:EOG) stands at 0%. These numbers suggest that CNQ 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 CNQ stands at 1 while EOG is at 1 whereas the debt ratio of the prior is 0.66 while the debt ratio of the later is 0.37.
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 1.9 for CNQ and 2 for EOG which means CNQ has Buy rating whereas EOG has Buy 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 CNQ is $40.74 which is 29.06% of its current price while EOG has price target of 142.31 which is 14.54% 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.
CNQ currently has price to earning P/E ratio of 17.36 whereas EOG has 42.32 while the forward P/E ratio for the prior stands at 10.35 and for the later it depicts the value of 17.24.
The price to Book P/B for CNQ is 1.41, Price to Sale is at 2.24 and for EOG these ratios stand at 4.02 and 5.01.