The shares of Intercontinental Exchange Inc. (NYSE:ICE) and Skyworks Solutions, Inc. (NASDAQ:SWKS) were among the active stocks of the last trading sessions. Intercontinental Exchange Inc. (NYSE:ICE) soared to 1.38% closing at the price of $76.91 whereas the shares of Skyworks Solutions, Inc. (NASDAQ:SWKS) declined -4.72% with the decrease of -4.22 points closing at the price of $85.27. Intercontinental Exchange Inc. has currently increase 8.98% in its stock over the period of 6-months while its rival Skyworks Solutions, Inc. subtracted -10.56% 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 Intercontinental Exchange Inc. (NYSE:ICE) is 7.1% while the ROI of Skyworks Solutions, Inc. (NASDAQ:SWKS) is 24.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ICE’s EBITDA Margin is 5.05 whereas SWKS’s is 8.51.
Both the profitability ratios suggest that Skyworks Solutions, Inc. (NASDAQ:SWKS) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Intercontinental Exchange Inc. (NYSE:ICE) reported $0.85/share EPS for the previous quarter where analysts were predicting an EPS to be $0.8/share Thus beating the analyst Estimates with a Surprise Factor of 6.2 Percent. While, Skyworks Solutions, Inc. (NASDAQ:SWKS) reported EPS of $1.64/share in the last quarter. The analysts projected EPS of $1.6/share depicting a Surprise of 2.5 Percent.
Taking a look at Earnings per Share, Intercontinental Exchange Inc. tends to be beating the analyst estimates more than Skyworks Solutions, Inc.. so ICE is more profitable than SWKS.
Technical Analysis of Intercontinental Exchange Inc. & Skyworks Solutions, Inc.
Moving average convergence divergence (MACD) shows that Intercontinental Exchange Inc. (NYSE:ICE) is on a PRICE RELATIVITY trend While Skyworks Solutions, Inc. (NASDAQ:SWKS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Intercontinental Exchange Inc. was in BULLISH territory and Skyworks Solutions, Inc. was in BULLISH territory.
ICE’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While SWKS’s candle is BEARISH with HIGH.
EPS Growth Rate: ICE’s 13.74% versus SWKS’s 13.03%
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 Intercontinental Exchange Inc. (NYSE:ICE) is predicted at 13.74% while Skyworks Solutions, Inc. (NASDAQ:SWKS) stands at 13.03%. These numbers suggest that ICE 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 ICE stands at 1 while SWKS is at 7.3 whereas the debt ratio of the prior is 0.46 while the debt ratio of the later is 0.
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 1.8 for ICE and 2.1 for SWKS which means ICE has Buy rating whereas SWKS 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 ICE is $85.84 which is 10.4% of its current price while SWKS has price target of 115.29 which is 26.04% 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.
ICE currently has price to earning P/E ratio of 24.36 whereas SWKS has 13.45 while the forward P/E ratio for the prior stands at 19.68 and for the later it depicts the value of 10.87.
The price to Book P/B for ICE is 2.61, Price to Sale is at 9.14 and for SWKS these ratios stand at 3.78 and 4.17.