The shares of Cisco Systems, Inc. (NASDAQ:CSCO) and Comcast Corporation (NASDAQ:CMCSA) were among the active stocks of the last trading sessions. Cisco Systems, Inc. (NASDAQ:CSCO) declined to -0.37% closing at the price of $45.48 whereas the shares of Comcast Corporation (NASDAQ:CMCSA) declined -0.76% with the decrease of -0.29 points closing at the price of $37.66. Cisco Systems, Inc. has currently decrease -0.55% in its stock over the period of 6-months while its rival Comcast Corporation added 16.27% 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 Cisco Systems, Inc. (NASDAQ:CSCO) is 14.2% while the ROI of Comcast Corporation (NASDAQ:CMCSA) is 9.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CSCO’s EBITDA Margin is 12.67 whereas CMCSA’s is 7.91.
Both the profitability ratios suggest that Cisco Systems, Inc. (NASDAQ:CSCO) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Cisco Systems, Inc. (NASDAQ:CSCO) reported $0.7/share EPS for the previous quarter where analysts were predicting an EPS to be $0.69/share Thus beating the analyst Estimates with a Surprise Factor of 1.4 Percent. While, Comcast Corporation (NASDAQ:CMCSA) reported EPS of $0.65/share in the last quarter. The analysts projected EPS of $0.61/share depicting a Surprise of 6.6 Percent.
Taking a look at Earnings per Share, Comcast Corporation tends to be beating the analyst estimates more than Cisco Systems, Inc.. so CMCSA is more profitable than CSCO.
Technical Analysis of Cisco Systems, Inc. & Comcast Corporation
Moving average convergence divergence (MACD) shows that Cisco Systems, Inc. (NASDAQ:CSCO) is on a PRICE RELATIVITY trend While Comcast Corporation (NASDAQ:CMCSA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Cisco Systems, Inc. was in BULLISH territory and Comcast Corporation was in BULLISH territory.
CSCO’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While CMCSA’s candle is BEARISH with HIGH.
EPS Growth Rate: CSCO’s 8.96% versus CMCSA’s 18.4%
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 Cisco Systems, Inc. (NASDAQ:CSCO) is predicted at 8.96% while Comcast Corporation (NASDAQ:CMCSA) stands at 18.4%. These numbers suggest that CMCSA 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 CSCO stands at 2.3 while CMCSA is at 1.2 whereas the debt ratio of the prior is 0.59 while the debt ratio of the later is 1.02.
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 2.1 for CSCO and 2 for CMCSA which means CSCO has Hold rating whereas CMCSA has Buy 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 CSCO is $51.36 which is 11.45% of its current price while CMCSA has price target of 43.7 which is 13.82% 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.
CSCO currently has price to earning P/E ratio of 21.18 whereas CMCSA has 15.43 while the forward P/E ratio for the prior stands at 13.93 and for the later it depicts the value of 13.42.
The price to Book P/B for CSCO is 4.92, Price to Sale is at 4.23 and for CMCSA these ratios stand at 2.4 and 1.95.