The shares of Xcel Energy Inc. (NASDAQ:XEL) and NiSource, Inc (NYSE:NI) were among the active stocks of the last trading sessions. Xcel Energy Inc. (NASDAQ:XEL) declined to -1.55% closing at the price of $47.72 whereas the shares of NiSource, Inc (NYSE:NI) soared 0.24% with the increase of 0.06 points closing at the price of $25.43. Xcel Energy Inc. has currently increase 3.45% in its stock over the period of 6-months while its rival NiSource, Inc subtracted -0.2% 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 Xcel Energy Inc. (NASDAQ:XEL) is 6.1% while the ROI of NiSource, Inc (NYSE:NI) is 3.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, XEL’s EBITDA Margin is 10.88 whereas NI’s is 12.49.
Both the profitability ratios suggest a mixed sentiment for Xcel Energy Inc. (NASDAQ:XEL) and NiSource, Inc (NYSE:NI).
EPS & Surprise Factor
Xcel Energy Inc. (NASDAQ:XEL) reported $0.96/share EPS for the previous quarter where analysts were predicting an EPS to be $0.98/share Thus lagging the analyst Estimates with a Surprise Factor of -2 Percent. While, NiSource, Inc (NYSE:NI) reported EPS of $0.1/share in the last quarter. The analysts projected EPS of $0.06/share depicting a Surprise of 66.7 Percent.
Taking a look at Earnings per Share, NiSource, Inc tends to be beating the analyst estimates more than Xcel Energy Inc.. so NI is more profitable than XEL.
Technical Analysis of Xcel Energy Inc. & NiSource, Inc
Moving average convergence divergence (MACD) shows that Xcel Energy Inc. (NASDAQ:XEL) is on a PRICE RELATIVITY trend While NiSource, Inc (NYSE:NI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Xcel Energy Inc. was in BEARISH territory and NiSource, Inc was in BEARISH territory.
XEL’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While NI’s candle is BEARISH with MEDIUM.
EPS Growth Rate: XEL’s 6.49% versus NI’s 5.91%
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 Xcel Energy Inc. (NASDAQ:XEL) is predicted at 6.49% while NiSource, Inc (NYSE:NI) stands at 5.91%. These numbers suggest that XEL 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 XEL stands at 0.8 while NI is at 0.4 whereas the debt ratio of the prior is 1.36 while the debt ratio of the later is 1.87.
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 2.5 for XEL and 2.4 for NI which means XEL has Hold rating whereas NI 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 XEL is $50.12 which is 4.79% of its current price while NI has price target of 26.69 which is 4.72% 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.
XEL currently has price to earning P/E ratio of 27.18 whereas NI has 0 while the forward P/E ratio for the prior stands at 18.35 and for the later it depicts the value of 18.91.
The price to Book P/B for XEL is 2, Price to Sale is at 2.17 and for NI these ratios stand at 1.98 and 1.83.