The shares of W&T Offshore, Inc. (NYSE:WTI) and Diamondback Energy, Inc. (NASDAQ:FANG) were among the active stocks of the last trading sessions. W&T Offshore, Inc. (NYSE:WTI) declined to -6.33% closing at the price of $7.1 whereas the shares of Diamondback Energy, Inc. (NASDAQ:FANG) declined -2.26% with the decrease of -2.62 points closing at the price of $113.37. W&T Offshore, Inc. has currently decrease -4.05% in its stock over the period of 6-months while its rival Diamondback Energy, Inc. subtracted -16.96% 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 W&T Offshore, Inc. (NYSE:WTI) is 56.4% while the ROI of Diamondback Energy, Inc. (NASDAQ:FANG) is 10.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WTI’s EBITDA Margin is 6.5 whereas FANG’s is 12.65.
Both the profitability ratios suggest a mixed sentiment for W&T Offshore, Inc. (NYSE:WTI) and Diamondback Energy, Inc. (NASDAQ:FANG).
EPS & Surprise Factor
W&T Offshore, Inc. (NYSE:WTI) reported $0.3/share EPS for the previous quarter where analysts were predicting an EPS to be $0.24/share Thus beating the analyst Estimates with a Surprise Factor of 25 Percent. While, Diamondback Energy, Inc. (NASDAQ:FANG) reported EPS of $1.67/share in the last quarter. The analysts projected EPS of $1.58/share depicting a Surprise of 5.7 Percent.
Taking a look at Earnings per Share, W&T Offshore, Inc. tends to be beating the analyst estimates more than Diamondback Energy, Inc.. so WTI is more profitable than FANG.
Technical Analysis of W&T Offshore, Inc. & Diamondback Energy, Inc.
Moving average convergence divergence (MACD) shows that W&T Offshore, Inc. (NYSE:WTI) is on a PRICE RELATIVITY trend While Diamondback Energy, Inc. (NASDAQ:FANG) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the W&T Offshore, Inc. was in BULLISH territory and Diamondback Energy, Inc. was in BULLISH territory.
WTI’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While FANG’s candle is BEARISH with MEDIUM.
EPS Growth Rate: WTI’s 0% versus FANG’s 49.31%
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 W&T Offshore, Inc. (NYSE:WTI) is predicted at 0% while Diamondback Energy, Inc. (NASDAQ:FANG) stands at 49.31%. These numbers suggest that FANG 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 WTI stands at 1.1 while FANG is at 0.5 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.35.
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 2.7 for WTI and 1.7 for FANG which means WTI has Hold rating whereas FANG 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 WTI is $8.25 which is 13.94% of its current price while FANG has price target of 171.36 which is 33.84% 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.
WTI currently has price to earning P/E ratio of 4.1 whereas FANG has 17.64 while the forward P/E ratio for the prior stands at 7.74 and for the later it depicts the value of 10.17.
The price to Book P/B for WTI is 0, Price to Sale is at 1.7 and for FANG these ratios stand at 1.99 and 6.62.