Which Stock will give you a Nice Return? Sempra Energy (SRE) or EOG Resources, Inc. (EOG)

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The shares of Sempra Energy (NYSE:SRE) and EOG Resources, Inc. (NYSE:EOG) were among the active stocks of the last trading sessions. Sempra Energy (NYSE:SRE) soared to 0.53% closing at the price of $115.91 whereas the shares of EOG Resources, Inc. (NYSE:EOG) declined -1.32% with the decrease of -1.59 points closing at the price of $118.55. Sempra Energy has currently increase 5.56% in its stock over the period of 6-months while its rival EOG Resources, Inc. added 4.02% 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 Sempra Energy (NYSE:SRE) is 4.8% 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, SRE’s EBITDA Margin is 16.26 whereas EOG’s is 11.96.

Both the profitability ratios suggest that Sempra Energy (NYSE:SRE) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Sempra Energy (NYSE:SRE) reported $1.35/share EPS for the previous quarter where analysts were predicting an EPS to be $1.19/share Thus beating the analyst Estimates with a Surprise Factor of 13.4 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, Sempra Energy tends to be beating the analyst estimates more than EOG Resources, Inc.. so SRE is more profitable than EOG.

Technical Analysis of Sempra Energy & EOG Resources, Inc.

Moving average convergence divergence (MACD) shows that Sempra Energy (NYSE:SRE) 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 Sempra Energy was in BEARISH territory and EOG Resources, Inc. was in BEARISH territory.

SRE’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While EOG’s candle is BEARISH with HIGH.

EPS Growth Rate: SRE’s 8.96% 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 Sempra Energy (NYSE:SRE) is predicted at 8.96% while EOG Resources, Inc. (NYSE:EOG) stands at 0%. These numbers suggest that SRE 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 SRE stands at 0.6 while EOG is at 1 whereas the debt ratio of the prior is 1.85 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.

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 1.8 for SRE and 2 for EOG which means SRE 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 SRE is $125.1 which is 7.35% of its current price while EOG has price target of 143.37 which is 17.31% 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.

SRE currently has price to earning P/E ratio of 126.4 whereas EOG has 41.25 while the forward P/E ratio for the prior stands at 19.08 and for the later it depicts the value of 16.2.

The price to Book P/B for SRE is 2.18, Price to Sale is at 2.83 and for EOG these ratios stand at 3.91 and 4.88.