The shares of Analog Devices, Inc. (NASDAQ:ADI) and Lincoln National Corporation (NYSE:LNC) were among the active stocks of the last trading sessions. Analog Devices, Inc. (NASDAQ:ADI) declined to -0.93% closing at the price of $87.18 whereas the shares of Lincoln National Corporation (NYSE:LNC) soared 3.67% with the increase of 2.24 points closing at the price of $63.3. Analog Devices, Inc. has currently decrease -3.67% in its stock over the period of 6-months while its rival Lincoln National Corporation subtracted -7.75% 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 Analog Devices, Inc. (NASDAQ:ADI) is 5.3% while the ROI of Lincoln National Corporation (NYSE:LNC) is 4.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ADI’s EBITDA Margin is 13.15 whereas LNC’s is 7.1.
Both the profitability ratios suggest that Analog Devices, Inc. (NASDAQ:ADI) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Analog Devices, Inc. (NASDAQ:ADI) reported $1.53/share EPS for the previous quarter where analysts were predicting an EPS to be $1.46/share Thus beating the analyst Estimates with a Surprise Factor of 4.8 Percent. While, Lincoln National Corporation (NYSE:LNC) reported EPS of $2.34/share in the last quarter. The analysts projected EPS of $2.17/share depicting a Surprise of 7.8 Percent.
Taking a look at Earnings per Share, Lincoln National Corporation tends to be beating the analyst estimates more than Analog Devices, Inc.. so LNC is more profitable than ADI.
Technical Analysis of Analog Devices, Inc. & Lincoln National Corporation
Moving average convergence divergence (MACD) shows that Analog Devices, Inc. (NASDAQ:ADI) is on a PRICE RELATIVITY trend While Lincoln National Corporation (NYSE:LNC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Analog Devices, Inc. was in BULLISH territory and Lincoln National Corporation was in BULLISH territory.
ADI’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While LNC’s candle is BULLISH with HIGH.
EPS Growth Rate: ADI’s 9.34% versus LNC’s 11.24%
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 Analog Devices, Inc. (NASDAQ:ADI) is predicted at 9.34% while Lincoln National Corporation (NYSE:LNC) stands at 11.24%. These numbers suggest that LNC 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 ADI stands at 1.6 while LNC is at 0 whereas the debt ratio of the prior is 0.6 while the debt ratio of the later is 0.38.
The values of the both ratios suggest that ADI 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 2.1 for ADI and 2.3 for LNC which means ADI has Hold rating whereas LNC 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 ADI is $104.95 which is 16.93% of its current price while LNC has price target of 79 which is 19.87% 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.
ADI currently has price to earning P/E ratio of 23.26 whereas LNC has 20.57 while the forward P/E ratio for the prior stands at 14.92 and for the later it depicts the value of 6.79.
The price to Book P/B for ADI is 2.98, Price to Sale is at 5.32 and for LNC these ratios stand at 0.91 and 0.93.