The shares of Cenovus Energy Inc (NYSE:CVE) and PPL Corporation (NYSE:PPL) were among the active stocks of the last trading sessions. Cenovus Energy Inc (NYSE:CVE) declined to -0.23% closing at the price of $8.75 whereas the shares of PPL Corporation (NYSE:PPL) soared 0.49% with the increase of 0.15 points closing at the price of $30.83. Cenovus Energy Inc has currently decrease -16.51% in its stock over the period of 6-months while its rival PPL Corporation added 7.87% 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 Cenovus Energy Inc (NYSE:CVE) is 1.3% while the ROI of PPL Corporation (NYSE:PPL) is 8.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CVE’s EBITDA Margin is 11.55 whereas PPL’s is 9.95.
Both the profitability ratios suggest a mixed sentiment for Cenovus Energy Inc (NYSE:CVE) and PPL Corporation (NYSE:PPL).
EPS & Surprise Factor
Cenovus Energy Inc (NYSE:CVE) reported $0.56/share EPS for the previous quarter where analysts were predicting an EPS to be $0.08/share Thus beating the analyst Estimates with a Surprise Factor of 600 Percent. While, PPL Corporation (NYSE:PPL) reported EPS of $0.59/share in the last quarter. The analysts projected EPS of $0.56/share depicting a Surprise of 5.4 Percent.
Taking a look at Earnings per Share, Cenovus Energy Inc tends to be beating the analyst estimates more than PPL Corporation. so CVE is more profitable than PPL.
Technical Analysis of Cenovus Energy Inc & PPL Corporation
Moving average convergence divergence (MACD) shows that Cenovus Energy Inc (NYSE:CVE) is on a PRICE RELATIVITY trend While PPL Corporation (NYSE:PPL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Cenovus Energy Inc was in BULLISH territory and PPL Corporation was in BULLISH territory.
CVE’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While PPL’s candle is BULLISH with MEDIUM.
EPS Growth Rate: CVE’s 0% versus PPL’s 4.31%
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 Cenovus Energy Inc (NYSE:CVE) is predicted at 0% while PPL Corporation (NYSE:PPL) stands at 4.31%. These numbers suggest that PPL 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 CVE stands at 1.2 while PPL is at 0.6 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.85.
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 2.5 for CVE and 2.5 for PPL which means CVE has Hold rating whereas PPL 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 CVE is $10.85 which is 19.35% of its current price while PPL has price target of 31.27 which is 1.41% 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.
CVE currently has price to earning P/E ratio of 0 whereas PPL has 11.9 while the forward P/E ratio for the prior stands at 12.09 and for the later it depicts the value of 12.67.
The price to Book P/B for CVE is 0.74, Price to Sale is at 0.71 and for PPL these ratios stand at 1.84 and 2.76.