The shares of CenturyLink, Inc. (NYSE:CTL) and ConAgra Brands, Inc. (NYSE:CAG) were among the active stocks of the last trading sessions. CenturyLink, Inc. (NYSE:CTL) soared to 0.71% closing at the price of $21.15 whereas the shares of ConAgra Brands, Inc. (NYSE:CAG) soared 0.17% with the increase of 0.06 points closing at the price of $35.06. CenturyLink, Inc. has currently increase 17.24% in its stock over the period of 6-months while its rival ConAgra Brands, Inc. subtracted -6.93% 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 CenturyLink, Inc. (NYSE:CTL) is 2.9% while the ROI of ConAgra Brands, Inc. (NYSE:CAG) is 8.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CTL’s EBITDA Margin is 7.95 whereas CAG’s is 12.17.
Both the profitability ratios suggest that ConAgra Brands, Inc. (NYSE:CAG) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
CenturyLink, Inc. (NYSE:CTL) reported $0.26/share EPS for the previous quarter where analysts were predicting an EPS to be $0.25/share Thus beating the analyst Estimates with a Surprise Factor of 4 Percent. While, ConAgra Brands, Inc. (NYSE:CAG) reported EPS of $0.47/share in the last quarter. The analysts projected EPS of $0.49/share depicting a Surprise of -4.1 Percent.
Taking a look at Earnings per Share, CenturyLink, Inc. tends to be beating the analyst estimates more than ConAgra Brands, Inc.. so CTL is more profitable than CAG.
Technical Analysis of CenturyLink, Inc. & ConAgra Brands, Inc.
Moving average convergence divergence (MACD) shows that CenturyLink, Inc. (NYSE:CTL) is on a PRICE RELATIVITY trend While ConAgra Brands, Inc. (NYSE:CAG) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the CenturyLink, Inc. was in BULLISH territory and ConAgra Brands, Inc. was in BEARISH territory.
CTL’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While CAG’s candle is BULLISH with MEDIUM.
EPS Growth Rate: CTL’s 0% versus CAG’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 CenturyLink, Inc. (NYSE:CTL) is predicted at 0% while ConAgra Brands, Inc. (NYSE:CAG) stands at 8%. These numbers suggest that CAG 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 CTL stands at 1 while CAG is at 0.8 whereas the debt ratio of the prior is 1.62 while the debt ratio of the later is 1.03.
The values of the both ratios suggest that CTL 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 2.6 for CTL and 1.8 for CAG which means CTL has Hold rating whereas CAG 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 CTL is $21.33 which is 0.84% of its current price while CAG has price target of 41.69 which is 15.9% 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.
CTL currently has price to earning P/E ratio of 37.11 whereas CAG has 24.05 while the forward P/E ratio for the prior stands at 16.95 and for the later it depicts the value of 14.24.
The price to Book P/B for CTL is 0.98, Price to Sale is at 1.06 and for CAG these ratios stand at 3.68 and 1.83.