The shares of Capital One Financial Corporation (NYSE:COF) and Geron Corporation (NASDAQ:GERN) were among the active stocks of the last trading sessions. Capital One Financial Corporation (NYSE:COF) declined to -1.24% closing at the price of $90.35 whereas the shares of Geron Corporation (NASDAQ:GERN) declined -2.84% with the decrease of -0.05 points closing at the price of $1.71. Capital One Financial Corporation has currently decrease -7.79% in its stock over the period of 6-months while its rival Geron Corporation subtracted -54.88% 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 Capital One Financial Corporation (NYSE:COF) is 13.3% while the ROI of Geron Corporation (NASDAQ:GERN) is -28.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, COF’s EBITDA Margin is NOT AVAILABLE whereas GERN’s is -5.47.
Both the profitability ratios suggest that Capital One Financial Corporation (NYSE:COF) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Capital One Financial Corporation (NYSE:COF) reported $3.71/share EPS for the previous quarter where analysts were predicting an EPS to be $2.63/share Thus beating the analyst Estimates with a Surprise Factor of 41.1 Percent. While, Geron Corporation (NASDAQ:GERN) reported EPS of $-0.04/share in the last quarter. The analysts projected EPS of $-0.04/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, Capital One Financial Corporation tends to be beating the analyst estimates more than Geron Corporation. so COF is more profitable than GERN.
Technical Analysis of Capital One Financial Corporation & Geron Corporation
Moving average convergence divergence (MACD) shows that Capital One Financial Corporation (NYSE:COF) is on a PRICE RELATIVITY trend While Geron Corporation (NASDAQ:GERN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Capital One Financial Corporation was in BEARISH territory and Geron Corporation was in BEARISH territory.
COF’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While GERN’s candle is NEUTRAL with LOW.
EPS Growth Rate: COF’s 11.85% versus GERN’s 5%
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 Capital One Financial Corporation (NYSE:COF) is predicted at 11.85% while Geron Corporation (NASDAQ:GERN) stands at 5%. These numbers suggest that COF 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 COF stands at 0 while GERN is at 33.1 whereas the debt ratio of the prior is 1.06 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.
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 for COF and 3 for GERN which means COF has Buy rating whereas GERN 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 COF is $115.41 which is 21.71% of its current price while GERN has price target of 1.5 which is -14% 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.
COF currently has price to earning P/E ratio of 8.74 whereas GERN has 0 while the forward P/E ratio for the prior stands at 8.04 and for the later it depicts the value of 0.
The price to Book P/B for COF is 0.88, Price to Sale is at 1.65 and for GERN these ratios stand at 1.68 and 342.68.