The shares of Noble Energy Inc. (NYSE:NBL) and Parsley Energy, Inc. (NYSE:PE) were among the active stocks of the last trading sessions. Noble Energy Inc. (NYSE:NBL) soared to 0.37% closing at the price of $27.03 whereas the shares of Parsley Energy, Inc. (NYSE:PE) declined -1.61% with the decrease of -0.41 points closing at the price of $25.05. Noble Energy Inc. has currently decrease -22.55% in its stock over the period of 6-months while its rival Parsley Energy, Inc. subtracted -22.9% 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 Noble Energy Inc. (NYSE:NBL) is -8.5% while the ROI of Parsley Energy, Inc. (NYSE:PE) is 3.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NBL’s EBITDA Margin is 8.7 whereas PE’s is 11.26.
Both the profitability ratios suggest that Parsley Energy, Inc. (NYSE:PE) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Noble Energy Inc. (NYSE:NBL) reported $0.27/share EPS for the previous quarter where analysts were predicting an EPS to be $0.18/share Thus beating the analyst Estimates with a Surprise Factor of 50 Percent. While, Parsley Energy, Inc. (NYSE:PE) reported EPS of $0.45/share in the last quarter. The analysts projected EPS of $0.44/share depicting a Surprise of 2.3 Percent.
Taking a look at Earnings per Share, Noble Energy Inc. tends to be beating the analyst estimates more than Parsley Energy, Inc.. so NBL is more profitable than PE.
Technical Analysis of Noble Energy Inc. & Parsley Energy, Inc.
Moving average convergence divergence (MACD) shows that Noble Energy Inc. (NYSE:NBL) is on a PRICE RELATIVITY trend While Parsley Energy, Inc. (NYSE:PE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Noble Energy Inc. was in BULLISH territory and Parsley Energy, Inc. was in BULLISH territory.
NBL’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While PE’s candle is BEARISH with HIGH.
EPS Growth Rate: NBL’s 0% versus PE’s 59.05%
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 Noble Energy Inc. (NYSE:NBL) is predicted at 0% while Parsley Energy, Inc. (NYSE:PE) stands at 59.05%. These numbers suggest that PE 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 NBL stands at 0.8 while PE is at 0.9 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.41.
The values of the both ratios suggest that PE 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 2.3 for NBL and 1.9 for PE which means NBL has Hold rating whereas PE 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 NBL is $42.92 which is 37.02% of its current price while PE has price target of 42.29 which is 40.77% 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.
NBL currently has price to earning P/E ratio of 168.94 whereas PE has 25.88 while the forward P/E ratio for the prior stands at 18.93 and for the later it depicts the value of 10.66.
The price to Book P/B for NBL is 1.26, Price to Sale is at 2.78 and for PE these ratios stand at 1.27 and 5.51.