Which Stock is better? Ingersoll-Rand plc (Ireland) (IR) and Accenture plc (ACN)

The shares of Ingersoll-Rand plc (Ireland) (NYSE:IR) and Accenture plc (NYSE:ACN) were among the active stocks of the last trading sessions. Ingersoll-Rand plc (Ireland) (NYSE:IR) declined to -1.31% closing at the price of $96.24 whereas the shares of Accenture plc (NYSE:ACN) declined -1.7% with the decrease of -2.7 points closing at the price of $156.2. Ingersoll-Rand plc (Ireland) has currently increase 15.17% in its stock over the period of 6-months while its rival Accenture plc added 2.49% 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 Ingersoll-Rand plc (Ireland) (NYSE:IR) is 14% while the ROI of Accenture plc (NYSE:ACN) is 40.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, IR’s EBITDA Margin is 12.48 whereas ACN’s is 14.09.

Both the profitability ratios suggest that Accenture plc (NYSE:ACN) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Ingersoll-Rand plc (Ireland) (NYSE:IR) reported $1.85/share EPS for the previous quarter where analysts were predicting an EPS to be $1.73/share Thus beating the analyst Estimates with a Surprise Factor of 6.9 Percent. While, Accenture plc (NYSE:ACN) reported EPS of $1.58/share in the last quarter. The analysts projected EPS of $1.56/share depicting a Surprise of 1.3 Percent.

Taking a look at Earnings per Share, Ingersoll-Rand plc (Ireland) tends to be beating the analyst estimates more than Accenture plc. so IR is more profitable than ACN.

Technical Analysis of Ingersoll-Rand plc (Ireland) & Accenture plc

Moving average convergence divergence (MACD) shows that Ingersoll-Rand plc (Ireland) (NYSE:IR) is on a PRICE RELATIVITY trend While Accenture plc (NYSE:ACN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Ingersoll-Rand plc (Ireland) was in BEARISH territory and Accenture plc was in BEARISH territory.

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

EPS Growth Rate: IR’s 13.97% versus ACN’s 8.37%

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 Ingersoll-Rand plc (Ireland) (NYSE:IR) is predicted at 13.97% while Accenture plc (NYSE:ACN) stands at 8.37%. These numbers suggest that IR 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 IR stands at 1.3 while ACN is at 1.3 whereas the debt ratio of the prior is 0.64 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 2.1 for IR and 2.3 for ACN which means IR has Hold rating whereas ACN 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 IR is $110.07 which is 12.56% of its current price while ACN has price target of 179.32 which is 12.89% 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.

IR currently has price to earning P/E ratio of 17.19 whereas ACN has 23.2 while the forward P/E ratio for the prior stands at 15.39 and for the later it depicts the value of 19.68.

The price to Book P/B for IR is 3.51, Price to Sale is at 1.58 and for ACN these ratios stand at 10.19 and 2.4.