The shares of Zoetis Inc. (NYSE:ZTS) and Patterson-UTI Energy, Inc. (NASDAQ:PTEN) were among the active stocks of the last trading sessions. Zoetis Inc. (NYSE:ZTS) declined to -1.57% closing at the price of $92.77 whereas the shares of Patterson-UTI Energy, Inc. (NASDAQ:PTEN) declined -1.57% with the decrease of -0.26 points closing at the price of $16.26. Zoetis Inc. has currently increase 12.93% in its stock over the period of 6-months while its rival Patterson-UTI Energy, Inc. subtracted -26.33% 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 Zoetis Inc. (NYSE:ZTS) is 16% while the ROI of Patterson-UTI Energy, Inc. (NASDAQ:PTEN) is -3.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ZTS’s EBITDA Margin is 21.88 whereas PTEN’s is 5.65.
Both the profitability ratios suggest that Zoetis Inc. (NYSE:ZTS) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Zoetis Inc. (NYSE:ZTS) reported $0.83/share EPS for the previous quarter where analysts were predicting an EPS to be $0.77/share Thus beating the analyst Estimates with a Surprise Factor of 7.8 Percent. While, Patterson-UTI Energy, Inc. (NASDAQ:PTEN) reported EPS of $-0.1/share in the last quarter. The analysts projected EPS of $-0.12/share depicting a Surprise of 16.7 Percent.
Taking a look at Earnings per Share, Patterson-UTI Energy, Inc. tends to be beating the analyst estimates more than Zoetis Inc.. so PTEN is more profitable than ZTS.
Technical Analysis of Zoetis Inc. & Patterson-UTI Energy, Inc.
Moving average convergence divergence (MACD) shows that Zoetis Inc. (NYSE:ZTS) is on a PRICE RELATIVITY trend While Patterson-UTI Energy, Inc. (NASDAQ:PTEN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Zoetis Inc. was in BULLISH territory and Patterson-UTI Energy, Inc. was in BULLISH territory.
ZTS’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While PTEN’s candle is BEARISH with HIGH.
EPS Growth Rate: ZTS’s 16.64% versus PTEN’s 22.6%
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 Zoetis Inc. (NYSE:ZTS) is predicted at 16.64% while Patterson-UTI Energy, Inc. (NASDAQ:PTEN) stands at 22.6%. These numbers suggest that PTEN 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 ZTS stands at 4.4 while PTEN is at 1.7 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.3.
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 1.9 for ZTS and 1.9 for PTEN which means ZTS has Buy rating whereas PTEN 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 ZTS is $100 which is 7.23% of its current price while PTEN has price target of 21.74 which is 25.21% 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.
ZTS currently has price to earning P/E ratio of 32.11 whereas PTEN has 0 while the forward P/E ratio for the prior stands at 26.89 and for the later it depicts the value of 0.
The price to Book P/B for ZTS is 22.79, Price to Sale is at 7.94 and for PTEN these ratios stand at 0.94 and 1.08.