Which Company would you put your All In? Marathon Oil Corporation (MRO) or Southwestern Energy Company (SWN)

The shares of Marathon Oil Corporation (NYSE:MRO) and Southwestern Energy Company (NYSE:SWN) were among the active stocks of the last trading sessions. Marathon Oil Corporation (NYSE:MRO) declined to -2.15% closing at the price of $18.21 whereas the shares of Southwestern Energy Company (NYSE:SWN) declined -1.46% with the decrease of -0.08 points closing at the price of $5.4. Marathon Oil Corporation has currently decrease -7.89% in its stock over the period of 6-months while its rival Southwestern Energy Company added 32.35% 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 Marathon Oil Corporation (NYSE:MRO) is -3.5% while the ROI of Southwestern Energy Company (NYSE:SWN) is 11.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MRO’s EBITDA Margin is 6.85 whereas SWN’s is 4.8.

Both the profitability ratios suggest a mixed sentiment for Marathon Oil Corporation (NYSE:MRO) and Southwestern Energy Company (NYSE:SWN).

EPS & Surprise Factor

Marathon Oil Corporation (NYSE:MRO) reported $0.15/share EPS for the previous quarter where analysts were predicting an EPS to be $0.2/share Thus lagging the analyst Estimates with a Surprise Factor of -25 Percent. While, Southwestern Energy Company (NYSE:SWN) reported EPS of $0.25/share in the last quarter. The analysts projected EPS of $0.21/share depicting a Surprise of 19 Percent.

Taking a look at Earnings per Share, Southwestern Energy Company tends to be beating the analyst estimates more than Marathon Oil Corporation. so SWN is more profitable than MRO.

Technical Analysis of Marathon Oil Corporation & Southwestern Energy Company

Moving average convergence divergence (MACD) shows that Marathon Oil Corporation (NYSE:MRO) is on a PRICE RELATIVITY trend While Southwestern Energy Company (NYSE:SWN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Marathon Oil Corporation was in BEARISH territory and Southwestern Energy Company was in BULLISH territory.

MRO’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While SWN’s candle is BEARISH with HIGH.

EPS Growth Rate: MRO’s 0% versus SWN’s 6.63%

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 Marathon Oil Corporation (NYSE:MRO) is predicted at 0% while Southwestern Energy Company (NYSE:SWN) stands at 6.63%. These numbers suggest that SWN 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 MRO stands at 1.5 while SWN is at 0.7 whereas the debt ratio of the prior is 0 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.

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 2 for MRO and 3 for SWN which means MRO has Buy rating whereas SWN 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 MRO is $26 which is 29.96% of its current price while SWN has price target of 6.34 which is 14.83% 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.

MRO currently has price to earning P/E ratio of 0 whereas SWN has 5.86 while the forward P/E ratio for the prior stands at 13.8 and for the later it depicts the value of 6.23.

The price to Book P/B for MRO is 1.28, Price to Sale is at 2.93 and for SWN these ratios stand at 1.42 and 0.91.