The shares of United Parcel Service, Inc. (NYSE:UPS) and Cirrus Logic, Inc. (NASDAQ:CRUS) were among the active stocks of the last trading sessions. United Parcel Service, Inc. (NYSE:UPS) declined to -1.42% closing at the price of $105.99 whereas the shares of Cirrus Logic, Inc. (NASDAQ:CRUS) soared 3.11% with the increase of 1.25 points closing at the price of $41.5. United Parcel Service, Inc. has currently decrease -5.47% in its stock over the period of 6-months while its rival Cirrus Logic, Inc. added 7.37% 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 United Parcel Service, Inc. (NYSE:UPS) is 19.9% while the ROI of Cirrus Logic, Inc. (NASDAQ:CRUS) is 18.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, UPS’s EBITDA Margin is 11.93 whereas CRUS’s is 6.96.
Both the profitability ratios suggest that United Parcel Service, Inc. (NYSE:UPS) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
United Parcel Service, Inc. (NYSE:UPS) reported $1.82/share EPS for the previous quarter where analysts were predicting an EPS to be $1.82/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, Cirrus Logic, Inc. (NASDAQ:CRUS) reported EPS of $1.08/share in the last quarter. The analysts projected EPS of $0.74/share depicting a Surprise of 45.9 Percent.
Taking a look at Earnings per Share, Cirrus Logic, Inc. tends to be beating the analyst estimates more than United Parcel Service, Inc.. so CRUS is more profitable than UPS.
Technical Analysis of United Parcel Service, Inc. & Cirrus Logic, Inc.
Moving average convergence divergence (MACD) shows that United Parcel Service, Inc. (NYSE:UPS) is on a PRICE RELATIVITY trend While Cirrus Logic, Inc. (NASDAQ:CRUS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the United Parcel Service, Inc. was in BEARISH territory and Cirrus Logic, Inc. was in BULLISH territory.
UPS’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While CRUS’s candle is BULLISH with HIGH.
EPS Growth Rate: UPS’s 11.59% versus CRUS’s 15%
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 United Parcel Service, Inc. (NYSE:UPS) is predicted at 11.59% while Cirrus Logic, Inc. (NASDAQ:CRUS) stands at 15%. These numbers suggest that CRUS 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 UPS stands at 1.2 while CRUS is at 4.1 whereas the debt ratio of the prior is 9.76 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 2.5 for UPS and 2.5 for CRUS which means UPS has Hold rating whereas CRUS 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 UPS is $125.52 which is 15.56% of its current price while CRUS has price target of 48.67 which is 14.73% 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.
UPS currently has price to earning P/E ratio of 17.8 whereas CRUS has 16.74 while the forward P/E ratio for the prior stands at 13.52 and for the later it depicts the value of 12.8.
The price to Book P/B for UPS is 39.4, Price to Sale is at 1.3 and for CRUS these ratios stand at 2.2 and 1.75.