The shares of 3M Company (NYSE:MMM) and Sabre Corporation (NASDAQ:SABR) were among the active stocks of the last trading sessions. 3M Company (NYSE:MMM) declined to -1.26% closing at the price of $200.38 whereas the shares of Sabre Corporation (NASDAQ:SABR) soared 0.86% with the increase of 0.21 points closing at the price of $24.54. 3M Company has currently decrease -7.98% in its stock over the period of 6-months while its rival Sabre Corporation added 21.01% 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 3M Company (NYSE:MMM) is 23.5% while the ROI of Sabre Corporation (NASDAQ:SABR) is 9.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MMM’s EBITDA Margin is 15.29 whereas SABR’s is 13.43.
Both the profitability ratios suggest that 3M Company (NYSE:MMM) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
3M Company (NYSE:MMM) reported $2.59/share EPS for the previous quarter where analysts were predicting an EPS to be $2.58/share Thus beating the analyst Estimates with a Surprise Factor of 0.4 Percent. While, Sabre Corporation (NASDAQ:SABR) reported EPS of $0.37/share in the last quarter. The analysts projected EPS of $0.35/share depicting a Surprise of 5.7 Percent.
Taking a look at Earnings per Share, Sabre Corporation tends to be beating the analyst estimates more than 3M Company. so SABR is more profitable than MMM.
Technical Analysis of 3M Company & Sabre Corporation
Moving average convergence divergence (MACD) shows that 3M Company (NYSE:MMM) is on a PRICE RELATIVITY trend While Sabre Corporation (NASDAQ:SABR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the 3M Company was in BEARISH territory and Sabre Corporation was in BULLISH territory.
MMM’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While SABR’s candle is BULLISH with MEDIUM.
EPS Growth Rate: MMM’s 9.65% versus SABR’s 8.43%
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 3M Company (NYSE:MMM) is predicted at 9.65% while Sabre Corporation (NASDAQ:SABR) stands at 8.43%. These numbers suggest that MMM 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 MMM stands at 1.6 while SABR is at 1.1 whereas the debt ratio of the prior is 1.4 while the debt ratio of the later is 3.91.
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 2.9 for MMM and 2 for SABR which means MMM has Hold rating whereas SABR 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 MMM is $211.5 which is 5.26% of its current price while SABR has price target of 27.4 which is 10.44% 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.
MMM currently has price to earning P/E ratio of 22.67 whereas SABR has 16.94 while the forward P/E ratio for the prior stands at 17.9 and for the later it depicts the value of 15.09.
The price to Book P/B for MMM is 11.43, Price to Sale is at 3.61 and for SABR these ratios stand at 7.72 and 1.76.