The shares of Quanta Services, Inc. (NYSE:PWR) and Treehouse Foods, Inc. (NYSE:THS) were among the active stocks of the last trading sessions. Quanta Services, Inc. (NYSE:PWR) soared to 2.84% closing at the price of $34.38 whereas the shares of Treehouse Foods, Inc. (NYSE:THS) soared 1.55% with the increase of 0.68 points closing at the price of $44.68. Quanta Services, Inc. has currently decrease -2.16% in its stock over the period of 6-months while its rival Treehouse Foods, Inc. subtracted -0.18% 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 Quanta Services, Inc. (NYSE:PWR) is 6.1% while the ROI of Treehouse Foods, Inc. (NYSE:THS) is -5.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PWR’s EBITDA Margin is 7.88 whereas THS’s is 9.35.
Both the profitability ratios suggest a mixed sentiment for Quanta Services, Inc. (NYSE:PWR) and Treehouse Foods, Inc. (NYSE:THS).
EPS & Surprise Factor
Quanta Services, Inc. (NYSE:PWR) reported $0.88/share EPS for the previous quarter where analysts were predicting an EPS to be $0.96/share Thus lagging the analyst Estimates with a Surprise Factor of -8.3 Percent. While, Treehouse Foods, Inc. (NYSE:THS) reported EPS of $0.62/share in the last quarter. The analysts projected EPS of $0.55/share depicting a Surprise of 12.7 Percent.
Taking a look at Earnings per Share, Treehouse Foods, Inc. tends to be beating the analyst estimates more than Quanta Services, Inc.. so THS is more profitable than PWR.
Technical Analysis of Quanta Services, Inc. & Treehouse Foods, Inc.
Moving average convergence divergence (MACD) shows that Quanta Services, Inc. (NYSE:PWR) is on a PRICE RELATIVITY trend While Treehouse Foods, Inc. (NYSE:THS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Quanta Services, Inc. was in BULLISH territory and Treehouse Foods, Inc. was in BEARISH territory.
PWR’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While THS’s candle is BULLISH with HIGH.
EPS Growth Rate: PWR’s 22.37% versus THS’s -3.17%
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 Quanta Services, Inc. (NYSE:PWR) is predicted at 22.37% while Treehouse Foods, Inc. (NYSE:THS) stands at -3.17%. These numbers suggest that PWR 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 PWR stands at 1.8 while THS is at 1.9 whereas the debt ratio of the prior is 0.23 while the debt ratio of the later is 1.07.
The values of the both ratios suggest that THS 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 1.8 for PWR and 2.7 for THS which means PWR has Buy rating whereas THS 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 PWR is $45.33 which is 24.16% of its current price while THS has price target of 50.92 which is 12.25% 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.
PWR currently has price to earning P/E ratio of 22.15 whereas THS has 0 while the forward P/E ratio for the prior stands at 10.86 and for the later it depicts the value of 17.31.
The price to Book P/B for PWR is 1.43, Price to Sale is at 0.52 and for THS these ratios stand at 1.15 and 0.4.