The shares of Eldorado Gold Corporation (NYSE:EGO) and Philip Morris International Inc (NYSE:PM) were among the active stocks of the last trading sessions. Eldorado Gold Corporation (NYSE:EGO) soared to 5.2% closing at the price of $0.7 whereas the shares of Philip Morris International Inc (NYSE:PM) soared 0.32% with the increase of 0.28 points closing at the price of $88.35. Eldorado Gold Corporation has currently decrease -31.12% in its stock over the period of 6-months while its rival Philip Morris International Inc added 7.91% 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 Eldorado Gold Corporation (NYSE:EGO) is -1.4% while the ROI of Philip Morris International Inc (NYSE:PM) is 39.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, EGO’s EBITDA Margin is 8.26 whereas PM’s is 12.76.
Both the profitability ratios suggest that Philip Morris International Inc (NYSE:PM) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Eldorado Gold Corporation (NYSE:EGO) reported $0/share EPS for the previous quarter where analysts were predicting an EPS to be $0.01/share Thus lagging the analyst Estimates with a Surprise Factor of -100 Percent. While, Philip Morris International Inc (NYSE:PM) reported EPS of $1.44/share in the last quarter. The analysts projected EPS of $1.28/share depicting a Surprise of 12.5 Percent.
Taking a look at Earnings per Share, Philip Morris International Inc tends to be beating the analyst estimates more than Eldorado Gold Corporation. so PM is more profitable than EGO.
Technical Analysis of Eldorado Gold Corporation & Philip Morris International Inc
Moving average convergence divergence (MACD) shows that Eldorado Gold Corporation (NYSE:EGO) is on a PRICE RELATIVITY trend While Philip Morris International Inc (NYSE:PM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Eldorado Gold Corporation was in BEARISH territory and Philip Morris International Inc was in BULLISH territory.
EGO’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While PM’s candle is BEARISH with MEDIUM.
EPS Growth Rate: EGO’s 5% versus PM’s 7.68%
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 Eldorado Gold Corporation (NYSE:EGO) is predicted at 5% while Philip Morris International Inc (NYSE:PM) stands at 7.68%. These numbers suggest that PM 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 EGO stands at 6.3 while PM is at 1.2 whereas the debt ratio of the prior is 0.17 while the debt ratio of the later is 0.
The values of the both ratios suggest that EGO 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 3 for EGO and 2.3 for PM which means EGO has Hold rating whereas PM 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 EGO is $1.98 which is 64.65% of its current price while PM has price target of 93.06 which is 5.06% 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.
EGO currently has price to earning P/E ratio of 0 whereas PM has 16.59 while the forward P/E ratio for the prior stands at 139.14 and for the later it depicts the value of 16.68.
The price to Book P/B for EGO is 0.16, Price to Sale is at 1.18 and for PM these ratios stand at 0 and 4.6.