Comparing Profitability of these two stocks: Apache Corporation (APA), Walgreens Boots Alliance, Inc. (WBA)

The shares of Apache Corporation (NYSE:APA) and Walgreens Boots Alliance, Inc. (NASDAQ:WBA) were among the active stocks of the last trading sessions. Apache Corporation (NYSE:APA) declined to -1.24% closing at the price of $35.94 whereas the shares of Walgreens Boots Alliance, Inc. (NASDAQ:WBA) declined -0.75% with the decrease of -0.6 points closing at the price of $79.3. Apache Corporation has currently decrease -8.94% in its stock over the period of 6-months while its rival Walgreens Boots Alliance, Inc. added 27.29% 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 Apache Corporation (NYSE:APA) is 10.2% while the ROI of Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is 12.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, APA’s EBITDA Margin is 5.97 whereas WBA’s is 11.12.

Both the profitability ratios suggest that Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Apache Corporation (NYSE:APA) reported $0.63/share EPS for the previous quarter where analysts were predicting an EPS to be $0.47/share Thus beating the analyst Estimates with a Surprise Factor of 34 Percent. While, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) reported EPS of $1.48/share in the last quarter. The analysts projected EPS of $1.45/share depicting a Surprise of 2.1 Percent.

Taking a look at Earnings per Share, Apache Corporation tends to be beating the analyst estimates more than Walgreens Boots Alliance, Inc.. so APA is more profitable than WBA.

Technical Analysis of Apache Corporation & Walgreens Boots Alliance, Inc.

Moving average convergence divergence (MACD) shows that Apache Corporation (NYSE:APA) is on a PRICE RELATIVITY trend While Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Apache Corporation was in BEARISH territory and Walgreens Boots Alliance, Inc. was in BULLISH territory.

APA’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While WBA’s candle is BEARISH with HIGH.

EPS Growth Rate: APA’s 0% versus WBA’s 10.63%

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 Apache Corporation (NYSE:APA) is predicted at 0% while Walgreens Boots Alliance, Inc. (NASDAQ:WBA) stands at 10.63%. These numbers suggest that WBA 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 APA stands at 1.3 while WBA is at 0.8 whereas the debt ratio of the prior is 1.08 while the debt ratio of the later is 0.55.

The values of the both ratios suggest that APA is more suitable investment when the liquidity and risk is the main concern.

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 3 for APA and 2.7 for WBA which means APA has Hold rating whereas WBA 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 APA is $50.8 which is 29.25% of its current price while WBA has price target of 76.95 which is -3.05% 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.

APA currently has price to earning P/E ratio of 14.18 whereas WBA has 16.08 while the forward P/E ratio for the prior stands at 15.05 and for the later it depicts the value of 11.24.

The price to Book P/B for APA is 1.81, Price to Sale is at 2.14 and for WBA these ratios stand at 2.97 and 0.58.