The shares of UnitedHealth Group Incorporated (NYSE:UNH) and Omega Healthcare Investors, Inc. (NYSE:OHI) were among the active stocks of the last trading sessions. UnitedHealth Group Incorporated (NYSE:UNH) soared to 0.97% closing at the price of $263.54 whereas the shares of Omega Healthcare Investors, Inc. (NYSE:OHI) declined -0.26% with the decrease of -0.09 points closing at the price of $34.45. UnitedHealth Group Incorporated has currently increase 14.98% in its stock over the period of 6-months while its rival Omega Healthcare Investors, Inc. added 21.47% 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 UnitedHealth Group Incorporated (NYSE:UNH) is 13.6% while the ROI of Omega Healthcare Investors, Inc. (NYSE:OHI) is 3.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, UNH’s EBITDA Margin is 15.12 whereas OHI’s is 19.02.
Both the profitability ratios suggest a mixed sentiment for UnitedHealth Group Incorporated (NYSE:UNH) and Omega Healthcare Investors, Inc. (NYSE:OHI).
EPS & Surprise Factor
UnitedHealth Group Incorporated (NYSE:UNH) reported $3.41/share EPS for the previous quarter where analysts were predicting an EPS to be $3.29/share Thus beating the analyst Estimates with a Surprise Factor of 3.6 Percent. While, Omega Healthcare Investors, Inc. (NYSE:OHI) reported EPS of $0.28/share in the last quarter. The analysts projected EPS of $0.39/share depicting a Surprise of -28.2 Percent.
Taking a look at Earnings per Share, UnitedHealth Group Incorporated tends to be beating the analyst estimates more than Omega Healthcare Investors, Inc.. so UNH is more profitable than OHI.
Technical Analysis of UnitedHealth Group Incorporated & Omega Healthcare Investors, Inc.
Moving average convergence divergence (MACD) shows that UnitedHealth Group Incorporated (NYSE:UNH) is on a PRICE RELATIVITY trend While Omega Healthcare Investors, Inc. (NYSE:OHI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the UnitedHealth Group Incorporated was in BULLISH territory and Omega Healthcare Investors, Inc. was in BULLISH territory.
UNH’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While OHI’s candle is BEARISH with HIGH.
EPS Growth Rate: UNH’s 15.8% versus OHI’s 15.8%
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 UnitedHealth Group Incorporated (NYSE:UNH) is predicted at 15.8% while Omega Healthcare Investors, Inc. (NYSE:OHI) stands at 15.8%. These numbers suggest that OHI 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 UNH stands at 0 while OHI is at 0 whereas the debt ratio of the prior is 0.73 while the debt ratio of the later is 1.26.
The values of the both ratios suggest that OHI 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 1.6 for UNH and 3 for OHI which means UNH has Buy rating whereas OHI 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 UNH is $305.36 which is 13.7% of its current price while OHI has price target of 31.11 which is -10.74% 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.
UNH currently has price to earning P/E ratio of 22.85 whereas OHI has 82.61 while the forward P/E ratio for the prior stands at 18.09 and for the later it depicts the value of 20.94.
The price to Book P/B for UNH is 5.24, Price to Sale is at 1.15 and for OHI these ratios stand at 1.95 and 8.03.