The shares of ConAgra Brands, Inc. (NYSE:CAG) and American Homes 4 Rent (NYSE:AMH) were among the active stocks of the last trading sessions. ConAgra Brands, Inc. (NYSE:CAG) declined to -1.74% closing at the price of $35 whereas the shares of American Homes 4 Rent (NYSE:AMH) declined -4.86% with the decrease of -1.02 points closing at the price of $19.95. ConAgra Brands, Inc. has currently decrease -6.34% in its stock over the period of 6-months while its rival American Homes 4 Rent subtracted -2.78% 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 ConAgra Brands, Inc. (NYSE:CAG) is 8.4% while the ROI of American Homes 4 Rent (NYSE:AMH) is 0.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CAG’s EBITDA Margin is 12.17 whereas AMH’s is 18.8.
Both the profitability ratios suggest a mixed sentiment for ConAgra Brands, Inc. (NYSE:CAG) and American Homes 4 Rent (NYSE:AMH).
EPS & Surprise Factor
ConAgra Brands, Inc. (NYSE:CAG) reported $0.47/share EPS for the previous quarter where analysts were predicting an EPS to be $0.49/share Thus lagging the analyst Estimates with a Surprise Factor of -4.1 Percent. While, American Homes 4 Rent (NYSE:AMH) reported EPS of $0.05/share in the last quarter. The analysts projected EPS of $0.05/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, American Homes 4 Rent tends to be beating the analyst estimates more than ConAgra Brands, Inc.. so AMH is more profitable than CAG.
Technical Analysis of ConAgra Brands, Inc. & American Homes 4 Rent
Moving average convergence divergence (MACD) shows that ConAgra Brands, Inc. (NYSE:CAG) is on a PRICE RELATIVITY trend While American Homes 4 Rent (NYSE:AMH) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the ConAgra Brands, Inc. was in BEARISH territory and American Homes 4 Rent was in BEARISH territory.
CAG’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While AMH’s candle is BEARISH with HIGH.
EPS Growth Rate: CAG’s 8% versus AMH’s 14.4%
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 ConAgra Brands, Inc. (NYSE:CAG) is predicted at 8% while American Homes 4 Rent (NYSE:AMH) stands at 14.4%. These numbers suggest that AMH 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 CAG stands at 0.8 while AMH is at 0 whereas the debt ratio of the prior is 1.03 while the debt ratio of the later is 0.52.
The values of the both ratios suggest that CAG 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 CAG and 1.9 for AMH which means CAG has Buy rating whereas AMH 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 CAG is $41.69 which is 16.05% of its current price while AMH has price target of 24.93 which is 19.98% 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.
CAG currently has price to earning P/E ratio of 24.01 whereas AMH has 0 while the forward P/E ratio for the prior stands at 14.22 and for the later it depicts the value of 77.93.
The price to Book P/B for CAG is 3.67, Price to Sale is at 1.82 and for AMH these ratios stand at 1.15 and 6.13.