The shares of Williams Companies, Inc. (The) (NYSE:WMB) and Amarin Corporation plc (NASDAQ:AMRN) were among the active stocks of the last trading sessions. Williams Companies, Inc. (The) (NYSE:WMB) declined to -0.66% closing at the price of $25.58 whereas the shares of Amarin Corporation plc (NASDAQ:AMRN) soared 1.02% with the increase of 0.23 points closing at the price of $22.87. Williams Companies, Inc. (The) has currently decrease -2.63% in its stock over the period of 6-months while its rival Amarin Corporation plc added 635.37% 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 Williams Companies, Inc. (The) (NYSE:WMB) is 3.1% while the ROI of Amarin Corporation plc (NASDAQ:AMRN) is -154.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WMB’s EBITDA Margin is 13.64 whereas AMRN’s is -91.69.
Both the profitability ratios suggest that Williams Companies, Inc. (The) (NYSE:WMB) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Williams Companies, Inc. (The) (NYSE:WMB) reported $0.13/share EPS for the previous quarter where analysts were predicting an EPS to be $0.23/share Thus lagging the analyst Estimates with a Surprise Factor of -43.5 Percent. While, Amarin Corporation plc (NASDAQ:AMRN) reported EPS of $-0.08/share in the last quarter. The analysts projected EPS of $-0.1/share depicting a Surprise of 20 Percent.
Taking a look at Earnings per Share, Amarin Corporation plc tends to be beating the analyst estimates more than Williams Companies, Inc. (The). so AMRN is more profitable than WMB.
Technical Analysis of Williams Companies, Inc. (The) & Amarin Corporation plc
Moving average convergence divergence (MACD) shows that Williams Companies, Inc. (The) (NYSE:WMB) is on a PRICE RELATIVITY trend While Amarin Corporation plc (NASDAQ:AMRN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Williams Companies, Inc. (The) was in BEARISH territory and Amarin Corporation plc was in BULLISH territory.
WMB’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While AMRN’s candle is BULLISH with MEDIUM.
EPS Growth Rate: WMB’s 8% versus AMRN’s 22.3%
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 Williams Companies, Inc. (The) (NYSE:WMB) is predicted at 8% while Amarin Corporation plc (NASDAQ:AMRN) stands at 22.3%. These numbers suggest that AMRN 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 WMB stands at 0.7 while AMRN is at 1.3 whereas the debt ratio of the prior is 1.43 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 1.9 for WMB and 1.6 for AMRN which means WMB has Buy rating whereas AMRN 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 WMB is $33.95 which is 24.65% of its current price while AMRN has price target of 25 which is 8.52% 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.
WMB currently has price to earning P/E ratio of 146.17 whereas AMRN has 0 while the forward P/E ratio for the prior stands at 22.8 and for the later it depicts the value of 544.52.
The price to Book P/B for WMB is 1.68, Price to Sale is at 3.58 and for AMRN these ratios stand at 0 and 32.6.