The shares of Aetna Inc. (NYSE:AET) and Whiting Petroleum Corporation (NYSE:WLL) were among the active stocks of the last trading sessions. Aetna Inc. (NYSE:AET) soared to 3.87% closing at the price of $207.05 whereas the shares of Whiting Petroleum Corporation (NYSE:WLL) soared 0.85% with the increase of 0.3 points closing at the price of $35.59. Aetna Inc. has currently increase 21.39% in its stock over the period of 6-months while its rival Whiting Petroleum Corporation subtracted -23.43% 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 Aetna Inc. (NYSE:AET) is 9.9% while the ROI of Whiting Petroleum Corporation (NYSE:WLL) is -12.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AET’s EBITDA Margin is 10.47 whereas WLL’s is 6.94.
Both the profitability ratios suggest that Aetna Inc. (NYSE:AET) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Aetna Inc. (NYSE:AET) reported $2.96/share EPS for the previous quarter where analysts were predicting an EPS to be $2.83/share Thus beating the analyst Estimates with a Surprise Factor of 4.6 Percent. While, Whiting Petroleum Corporation (NYSE:WLL) reported EPS of $0.92/share in the last quarter. The analysts projected EPS of $0.58/share depicting a Surprise of 58.6 Percent.
Taking a look at Earnings per Share, Whiting Petroleum Corporation tends to be beating the analyst estimates more than Aetna Inc.. so WLL is more profitable than AET.
Technical Analysis of Aetna Inc. & Whiting Petroleum Corporation
Moving average convergence divergence (MACD) shows that Aetna Inc. (NYSE:AET) is on a PRICE RELATIVITY trend While Whiting Petroleum Corporation (NYSE:WLL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Aetna Inc. was in BULLISH territory and Whiting Petroleum Corporation was in BEARISH territory.
AET’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While WLL’s candle is BULLISH with HIGH.
EPS Growth Rate: AET’s 10.09% versus WLL’s 0%
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 Aetna Inc. (NYSE:AET) is predicted at 10.09% while Whiting Petroleum Corporation (NYSE:WLL) stands at 0%. These numbers suggest that AET 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 AET stands at 0 while WLL is at 0.6 whereas the debt ratio of the prior is 0.45 while the debt ratio of the later is 0.7.
The values of the both ratios suggest that WLL 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 AET and 2.2 for WLL which means AET has Hold rating whereas WLL 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 AET is $206.8 which is -0.12% of its current price while WLL has price target of 58.97 which is 39.65% 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.
AET currently has price to earning P/E ratio of 18.14 whereas WLL has 0 while the forward P/E ratio for the prior stands at 16.69 and for the later it depicts the value of 7.87.
The price to Book P/B for AET is 3.71, Price to Sale is at 1.12 and for WLL these ratios stand at 0.8 and 1.63.