The shares of Cabot Oil & Gas Corporation (NYSE:COG) and Colgate-Palmolive Company (NYSE:CL) were among the active stocks of the last trading sessions. Cabot Oil & Gas Corporation (NYSE:COG) declined to -0.77% closing at the price of $25.79 whereas the shares of Colgate-Palmolive Company (NYSE:CL) soared 0.46% with the increase of 0.28 points closing at the price of $60.51. Cabot Oil & Gas Corporation has currently increase 11.65% in its stock over the period of 6-months while its rival Colgate-Palmolive Company subtracted -2.26% 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 Cabot Oil & Gas Corporation (NYSE:COG) is -1.6% while the ROI of Colgate-Palmolive Company (NYSE:CL) is 39.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, COG’s EBITDA Margin is 12.3 whereas CL’s is 13.78.
Both the profitability ratios suggest that Colgate-Palmolive Company (NYSE:CL) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Cabot Oil & Gas Corporation (NYSE:COG) reported $0.25/share EPS for the previous quarter where analysts were predicting an EPS to be $0.28/share Thus lagging the analyst Estimates with a Surprise Factor of -10.7 Percent. While, Colgate-Palmolive Company (NYSE:CL) reported EPS of $0.72/share in the last quarter. The analysts projected EPS of $0.72/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, Colgate-Palmolive Company tends to be beating the analyst estimates more than Cabot Oil & Gas Corporation. so CL is more profitable than COG.
Technical Analysis of Cabot Oil & Gas Corporation & Colgate-Palmolive Company
Moving average convergence divergence (MACD) shows that Cabot Oil & Gas Corporation (NYSE:COG) is on a PRICE RELATIVITY trend While Colgate-Palmolive Company (NYSE:CL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Cabot Oil & Gas Corporation was in BULLISH territory and Colgate-Palmolive Company was in BEARISH territory.
COG’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While CL’s candle is BEARISH with HIGH.
EPS Growth Rate: COG’s 56.18% versus CL’s 5.2%
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 Cabot Oil & Gas Corporation (NYSE:COG) is predicted at 56.18% while Colgate-Palmolive Company (NYSE:CL) stands at 5.2%. These numbers suggest that COG 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 COG stands at 1.7 while CL is at 1.1 whereas the debt ratio of the prior is 0.71 while the debt ratio of the later is 0.
The values of the both ratios suggest that COG 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 2.4 for COG and 2.8 for CL which means COG has Hold rating whereas CL 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 COG is $26.79 which is 3.73% of its current price while CL has price target of 63.08 which is 4.07% 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.
COG currently has price to earning P/E ratio of 6447.5 whereas CL has 22.19 while the forward P/E ratio for the prior stands at 15.74 and for the later it depicts the value of 19.72.
The price to Book P/B for COG is 5.4, Price to Sale is at 6.03 and for CL these ratios stand at 0 and 3.35.