The shares of FMC Corporation (NYSE:FMC) and Yelp Inc. (NYSE:YELP) were among the active stocks of the last trading sessions. FMC Corporation (NYSE:FMC) soared to 3.9% closing at the price of $83.63 whereas the shares of Yelp Inc. (NYSE:YELP) soared 2.44% with the increase of 1.06 points closing at the price of $44.53. FMC Corporation has currently decrease -3.18% in its stock over the period of 6-months while its rival Yelp Inc. subtracted -7.07% 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 FMC Corporation (NYSE:FMC) is 5.4% while the ROI of Yelp Inc. (NYSE:YELP) is 13.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, FMC’s EBITDA Margin is 11.71 whereas YELP’s is 70.94.
Both the profitability ratios suggest that Yelp Inc. (NYSE:YELP) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
FMC Corporation (NYSE:FMC) reported $0.98/share EPS for the previous quarter where analysts were predicting an EPS to be $0.92/share Thus beating the analyst Estimates with a Surprise Factor of 6.5 Percent. While, Yelp Inc. (NYSE:YELP) reported EPS of $0.12/share in the last quarter. The analysts projected EPS of $0.01/share depicting a Surprise of 1100 Percent.
Taking a look at Earnings per Share, Yelp Inc. tends to be beating the analyst estimates more than FMC Corporation. so YELP is more profitable than FMC.
Technical Analysis of FMC Corporation & Yelp Inc.
Moving average convergence divergence (MACD) shows that FMC Corporation (NYSE:FMC) is on a PRICE RELATIVITY trend While Yelp Inc. (NYSE:YELP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the FMC Corporation was in BULLISH territory and Yelp Inc. was in BULLISH territory.
FMC’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While YELP’s candle is BULLISH with MEDIUM.
EPS Growth Rate: FMC’s 27.8% versus YELP’s 21%
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 FMC Corporation (NYSE:FMC) is predicted at 27.8% while Yelp Inc. (NYSE:YELP) stands at 21%. These numbers suggest that FMC 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 FMC stands at 1.6 while YELP is at 13.7 whereas the debt ratio of the prior is 1.02 while the debt ratio of the later is 0.
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 2.1 for FMC and 2.4 for YELP which means FMC has Hold rating whereas YELP 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 FMC is $102.5 which is 18.41% of its current price while YELP has price target of 51.22 which is 13.06% 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.
FMC currently has price to earning P/E ratio of 21.32 whereas YELP has 25.19 while the forward P/E ratio for the prior stands at 12.41 and for the later it depicts the value of 72.88.
The price to Book P/B for FMC is 3.76, Price to Sale is at 2.78 and for YELP these ratios stand at 3.4 and 4.21.