The shares of Total S.A. (NYSE:TOT) and Seagate Technology PLC (NASDAQ:STX) were among the active stocks of the last trading sessions. Total S.A. (NYSE:TOT) declined to -1.86% closing at the price of $60.53 whereas the shares of Seagate Technology PLC (NASDAQ:STX) declined -0.82% with the decrease of -0.36 points closing at the price of $43.76. Total S.A. has currently decrease -2.68% in its stock over the period of 6-months while its rival Seagate Technology PLC subtracted -26.63% 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 Total S.A. (NYSE:TOT) is 4.6% while the ROI of Seagate Technology PLC (NASDAQ:STX) is 29.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, TOT’s EBITDA Margin is 6.35 whereas STX’s is 6.73.
Both the profitability ratios suggest that Seagate Technology PLC (NASDAQ:STX) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Total S.A. (NYSE:TOT) reported $1.32/share EPS for the previous quarter where analysts were predicting an EPS to be $1.47/share Thus lagging the analyst Estimates with a Surprise Factor of -10.2 Percent. While, Seagate Technology PLC (NASDAQ:STX) reported EPS of $1.62/share in the last quarter. The analysts projected EPS of $1.45/share depicting a Surprise of 11.7 Percent.
Taking a look at Earnings per Share, Seagate Technology PLC tends to be beating the analyst estimates more than Total S.A.. so STX is more profitable than TOT.
Technical Analysis of Total S.A. & Seagate Technology PLC
Moving average convergence divergence (MACD) shows that Total S.A. (NYSE:TOT) is on a PRICE RELATIVITY trend While Seagate Technology PLC (NASDAQ:STX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Total S.A. was in BEARISH territory and Seagate Technology PLC was in BEARISH territory.
TOT’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While STX’s candle is BULLISH with LOW.
EPS Growth Rate: TOT’s 0.5% versus STX’s 8.82%
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 Total S.A. (NYSE:TOT) is predicted at 0.5% while Seagate Technology PLC (NASDAQ:STX) stands at 8.82%. These numbers suggest that STX 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 TOT stands at 1.3 while STX is at 1.4 whereas the debt ratio of the prior is 0.46 while the debt ratio of the later is 2.89.
The values of the both ratios suggest that STX is more suitable investment when the liquidity and risk is the main concern.
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 TOT and 2.9 for STX which means TOT has Buy rating whereas STX 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 TOT is $74.25 which is 18.48% of its current price while STX has price target of 57.05 which is 23.3% 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.
TOT currently has price to earning P/E ratio of 16.2 whereas STX has 7.51 while the forward P/E ratio for the prior stands at 9.28 and for the later it depicts the value of 7.24.
The price to Book P/B for TOT is 1.38, Price to Sale is at 0.96 and for STX these ratios stand at 7.57 and 1.14.