The shares of MGM Resorts International (NYSE:MGM) and Masco Corporation (NYSE:MAS) were among the active stocks of the last trading sessions. MGM Resorts International (NYSE:MGM) soared to 0.97% closing at the price of $28.17 whereas the shares of Masco Corporation (NYSE:MAS) declined -0.22% with the decrease of -0.07 points closing at the price of $31.32. MGM Resorts International has currently decrease -10.88% in its stock over the period of 6-months while its rival Masco Corporation subtracted -18.22% 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 MGM Resorts International (NYSE:MGM) is 7.1% while the ROI of Masco Corporation (NYSE:MAS) is 27.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MGM’s EBITDA Margin is 12.38 whereas MAS’s is 9.53.
Both the profitability ratios suggest a mixed sentiment for MGM Resorts International (NYSE:MGM) and Masco Corporation (NYSE:MAS).
EPS & Surprise Factor
MGM Resorts International (NYSE:MGM) reported $0.25/share EPS for the previous quarter where analysts were predicting an EPS to be $0.19/share Thus beating the analyst Estimates with a Surprise Factor of 31.6 Percent. While, Masco Corporation (NYSE:MAS) reported EPS of $0.65/share in the last quarter. The analysts projected EPS of $0.7/share depicting a Surprise of -7.1 Percent.
Taking a look at Earnings per Share, MGM Resorts International tends to be beating the analyst estimates more than Masco Corporation. so MGM is more profitable than MAS.
Technical Analysis of MGM Resorts International & Masco Corporation
Moving average convergence divergence (MACD) shows that MGM Resorts International (NYSE:MGM) is on a PRICE RELATIVITY trend While Masco Corporation (NYSE:MAS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the MGM Resorts International was in BULLISH territory and Masco Corporation was in BULLISH territory.
MGM’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While MAS’s candle is BEARISH with HIGH.
EPS Growth Rate: MGM’s 7.7% versus MAS’s 15.76%
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 MGM Resorts International (NYSE:MGM) is predicted at 7.7% while Masco Corporation (NYSE:MAS) stands at 15.76%. These numbers suggest that MAS 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 MGM stands at 0.7 while MAS is at 1.7 whereas the debt ratio of the prior is 1.97 while the debt ratio of the later is 82.58.
The values of the both ratios suggest that MAS 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 2.1 for MGM and 2.1 for MAS which means MGM has Hold rating whereas MAS 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 MGM is $33.82 which is 16.71% of its current price while MAS has price target of 38.94 which is 19.57% 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.
MGM currently has price to earning P/E ratio of 29.44 whereas MAS has 16.01 while the forward P/E ratio for the prior stands at 21.09 and for the later it depicts the value of 11.35.
The price to Book P/B for MGM is 2.26, Price to Sale is at 1.38 and for MAS these ratios stand at 261 and 1.17.