The shares of People’s United Financial, Inc. (NASDAQ:PBCT) and International Game Technology (NYSE:IGT) were among the active stocks of the last trading sessions. People’s United Financial, Inc. (NASDAQ:PBCT) declined to -0.06% closing at the price of $15.77 whereas the shares of International Game Technology (NYSE:IGT) declined -1.2% with the decrease of -0.21 points closing at the price of $17.33. People’s United Financial, Inc. has currently decrease -15.4% in its stock over the period of 6-months while its rival International Game Technology subtracted -38.15% 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 People’s United Financial, Inc. (NASDAQ:PBCT) is 14% while the ROI of International Game Technology (NYSE:IGT) is -1.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PBCT’s EBITDA Margin is NOT AVAILABLE whereas IGT’s is 7.8.
Both the profitability ratios suggest that People’s United Financial, Inc. (NASDAQ:PBCT) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
People’s United Financial, Inc. (NASDAQ:PBCT) reported $0.33/share EPS for the previous quarter where analysts were predicting an EPS to be $0.33/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, International Game Technology (NYSE:IGT) reported EPS of $0.31/share in the last quarter. The analysts projected EPS of $0.29/share depicting a Surprise of 6.9 Percent.
Taking a look at Earnings per Share, International Game Technology tends to be beating the analyst estimates more than People’s United Financial, Inc.. so IGT is more profitable than PBCT.
Technical Analysis of People’s United Financial, Inc. & International Game Technology
Moving average convergence divergence (MACD) shows that People’s United Financial, Inc. (NASDAQ:PBCT) is on a PRICE RELATIVITY trend While International Game Technology (NYSE:IGT) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the People’s United Financial, Inc. was in BULLISH territory and International Game Technology was in BULLISH territory.
PBCT’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While IGT’s candle is BEARISH with HIGH.
EPS Growth Rate: PBCT’s 2% versus IGT’s 27.76%
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 People’s United Financial, Inc. (NASDAQ:PBCT) is predicted at 2% while International Game Technology (NYSE:IGT) stands at 27.76%. These numbers suggest that IGT 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 PBCT stands at 0 while IGT is at 1 whereas the debt ratio of the prior is 0.16 while the debt ratio of the later is 4.14.
The values of the both ratios suggest that IGT 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 2.9 for PBCT and 1.9 for IGT which means PBCT has Hold rating whereas IGT 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 PBCT is $18.7 which is 15.67% of its current price while IGT has price target of 25.19 which is 31.2% 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.
PBCT currently has price to earning P/E ratio of 12.91 whereas IGT has 72.51 while the forward P/E ratio for the prior stands at 10.98 and for the later it depicts the value of 10.27.
The price to Book P/B for PBCT is 0.95, Price to Sale is at 4.08 and for IGT these ratios stand at 1.8 and 0.74.