The shares of HP Inc. (NYSE:HPQ) and Schlumberger N.V. (NYSE:SLB) were among the active stocks of the last trading sessions. HP Inc. (NYSE:HPQ) soared to 0.97% closing at the price of $24.88 whereas the shares of Schlumberger N.V. (NYSE:SLB) soared 0.23% with the increase of 0.12 points closing at the price of $52.08. HP Inc. has currently increase 10.19% in its stock over the period of 6-months while its rival Schlumberger N.V. subtracted -26.52% 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 HP Inc. (NYSE:HPQ) is 62.8% while the ROI of Schlumberger N.V. (NYSE:SLB) is -1.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HPQ’s EBITDA Margin is 8.02 whereas SLB’s is 13.1.
Both the profitability ratios suggest a mixed sentiment for HP Inc. (NYSE:HPQ) and Schlumberger N.V. (NYSE:SLB).
EPS & Surprise Factor
HP Inc. (NYSE:HPQ) reported $0.52/share EPS for the previous quarter where analysts were predicting an EPS to be $0.51/share Thus beating the analyst Estimates with a Surprise Factor of 2 Percent. While, Schlumberger N.V. (NYSE:SLB) reported EPS of $0.46/share in the last quarter. The analysts projected EPS of $0.45/share depicting a Surprise of 2.2 Percent.
Taking a look at Earnings per Share, Schlumberger N.V. tends to be beating the analyst estimates more than HP Inc.. so SLB is more profitable than HPQ.
Technical Analysis of HP Inc. & Schlumberger N.V.
Moving average convergence divergence (MACD) shows that HP Inc. (NYSE:HPQ) is on a PRICE RELATIVITY trend While Schlumberger N.V. (NYSE:SLB) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the HP Inc. was in BULLISH territory and Schlumberger N.V. was in BEARISH territory.
HPQ’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While SLB’s candle is BULLISH with MEDIUM.
EPS Growth Rate: HPQ’s 11.7% versus SLB’s 28.97%
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 HP Inc. (NYSE:HPQ) is predicted at 11.7% while Schlumberger N.V. (NYSE:SLB) stands at 28.97%. These numbers suggest that SLB 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 HPQ stands at 0.9 while SLB is at 1.1 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.48.
The values of the both ratios suggest that SLB 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 HPQ and 2.2 for SLB which means HPQ has Hold rating whereas SLB 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 HPQ is $27.93 which is 10.92% of its current price while SLB has price target of 70.9 which is 26.54% 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.
HPQ currently has price to earning P/E ratio of 15.45 whereas SLB has 0 while the forward P/E ratio for the prior stands at 11.37 and for the later it depicts the value of 23.29.
The price to Book P/B for HPQ is 0, Price to Sale is at 0.7 and for SLB these ratios stand at 1.97 and 2.21.