The shares of New Residential Investment Corp. (NYSE:NRZ) and Williams Companies, Inc. (The) (NYSE:WMB) were among the active stocks of the last trading sessions. New Residential Investment Corp. (NYSE:NRZ) declined to -0.23% closing at the price of $17.26 whereas the shares of Williams Companies, Inc. (The) (NYSE:WMB) soared 0.08% with the increase of 0.02 points closing at the price of $25.74. New Residential Investment Corp. has currently decrease -3.31% in its stock over the period of 6-months while its rival Williams Companies, Inc. (The) subtracted -2.94% 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 New Residential Investment Corp. (NYSE:NRZ) is 4.9% while the ROI of Williams Companies, Inc. (The) (NYSE:WMB) is 3.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NRZ’s EBITDA Margin is NOT AVAILABLE whereas WMB’s is 13.64.
Both the profitability ratios suggest that New Residential Investment Corp. (NYSE:NRZ) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
New Residential Investment Corp. (NYSE:NRZ) reported $0.63/share EPS for the previous quarter where analysts were predicting an EPS to be $0.55/share Thus beating the analyst Estimates with a Surprise Factor of 14.5 Percent. While, Williams Companies, Inc. (The) (NYSE:WMB) reported EPS of $0.13/share in the last quarter. The analysts projected EPS of $0.23/share depicting a Surprise of -43.5 Percent.
Taking a look at Earnings per Share, New Residential Investment Corp. tends to be beating the analyst estimates more than Williams Companies, Inc. (The). so NRZ is more profitable than WMB.
Technical Analysis of New Residential Investment Corp. & Williams Companies, Inc. (The)
Moving average convergence divergence (MACD) shows that New Residential Investment Corp. (NYSE:NRZ) is on a PRICE RELATIVITY trend While Williams Companies, Inc. (The) (NYSE:WMB) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the New Residential Investment Corp. was in BEARISH territory and Williams Companies, Inc. (The) was in BULLISH territory.
NRZ’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While WMB’s candle is BEARISH with HIGH.
EPS Growth Rate: NRZ’s -7.34% versus WMB’s 8%
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 New Residential Investment Corp. (NYSE:NRZ) is predicted at -7.34% while Williams Companies, Inc. (The) (NYSE:WMB) stands at 8%. These numbers suggest that WMB 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 NRZ stands at 0 while WMB is at 0.7 whereas the debt ratio of the prior is 3.77 while the debt ratio of the later is 1.43.
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 1.8 for NRZ and 1.9 for WMB which means NRZ has Buy rating whereas WMB 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 NRZ is $19.56 which is 11.76% of its current price while WMB has price target of 33.95 which is 24.18% 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.
NRZ currently has price to earning P/E ratio of 4.58 whereas WMB has 147.09 while the forward P/E ratio for the prior stands at 7.43 and for the later it depicts the value of 22.94.
The price to Book P/B for NRZ is 1.02, Price to Sale is at 2.37 and for WMB these ratios stand at 1.69 and 3.6.