Two Worthy Stocks comparison for Investors: PNC Financial Services Group, Inc. (The) (PNC), Plains All American Pipeline, L.P. (PAA)

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The shares of PNC Financial Services Group, Inc. (The) (NYSE:PNC) and Plains All American Pipeline, L.P. (NYSE:PAA) were among the active stocks of the last trading sessions. PNC Financial Services Group, Inc. (The) (NYSE:PNC) declined to -2.44% closing at the price of $124.22 whereas the shares of Plains All American Pipeline, L.P. (NYSE:PAA) declined -1.66% with the decrease of -0.41 points closing at the price of $24.3. PNC Financial Services Group, Inc. (The) has currently decrease -13.81% in its stock over the period of 6-months while its rival Plains All American Pipeline, L.P. subtracted -1.5% 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 PNC Financial Services Group, Inc. (The) (NYSE:PNC) is 8.6% while the ROI of Plains All American Pipeline, L.P. (NYSE:PAA) is 10.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PNC’s EBITDA Margin is NOT AVAILABLE whereas PAA’s is 20.78.

Both the profitability ratios suggest a mixed sentiment for PNC Financial Services Group, Inc. (The) (NYSE:PNC) and Plains All American Pipeline, L.P. (NYSE:PAA).

EPS & Surprise Factor

PNC Financial Services Group, Inc. (The) (NYSE:PNC) reported $2.82/share EPS for the previous quarter where analysts were predicting an EPS to be $2.72/share Thus beating the analyst Estimates with a Surprise Factor of 3.7 Percent. While, Plains All American Pipeline, L.P. (NYSE:PAA) reported EPS of $0.07/share in the last quarter. The analysts projected EPS of $0.22/share depicting a Surprise of -68.2 Percent.

Taking a look at Earnings per Share, PNC Financial Services Group, Inc. (The) tends to be beating the analyst estimates more than Plains All American Pipeline, L.P.. so PNC is more profitable than PAA.

Technical Analysis of PNC Financial Services Group, Inc. (The) & Plains All American Pipeline, L.P.

Moving average convergence divergence (MACD) shows that PNC Financial Services Group, Inc. (The) (NYSE:PNC) is on a PRICE RELATIVITY trend While Plains All American Pipeline, L.P. (NYSE:PAA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the PNC Financial Services Group, Inc. (The) was in BEARISH territory and Plains All American Pipeline, L.P. was in BEARISH territory.

PNC’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While PAA’s candle is BULLISH with MEDIUM.

EPS Growth Rate: PNC’s 10.15% versus PAA’s 20.22%

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 PNC Financial Services Group, Inc. (The) (NYSE:PNC) is predicted at 10.15% while Plains All American Pipeline, L.P. (NYSE:PAA) stands at 20.22%. These numbers suggest that PAA 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 PNC stands at 0 while PAA is at 0.8 whereas the debt ratio of the prior is 0.79 while the debt ratio of the later is 1.16.

The values of the both ratios suggest that PAA 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 2.4 for PNC and 2.2 for PAA which means PNC has Hold rating whereas PAA 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 PNC is $159.09 which is 21.92% of its current price while PAA has price target of 28 which is 13.21% 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.

PNC currently has price to earning P/E ratio of 13.77 whereas PAA has 14.24 while the forward P/E ratio for the prior stands at 10.68 and for the later it depicts the value of 12.02.

The price to Book P/B for PNC is 1.24, Price to Sale is at 5.26 and for PAA these ratios stand at 2.06 and 0.59.