Which stock will you Buy? Discover Financial Services (DFS) or CNX Resources Corporation (CNX)

The shares of Discover Financial Services (NYSE:DFS) and CNX Resources Corporation (NYSE:CNX) were among the active stocks of the last trading sessions. Discover Financial Services (NYSE:DFS) soared to 0.56% closing at the price of $69.57 whereas the shares of CNX Resources Corporation (NYSE:CNX) soared 0.84% with the increase of 0.13 points closing at the price of $15.57. Discover Financial Services has currently decrease -6.14% in its stock over the period of 6-months while its rival CNX Resources Corporation added 0.13% 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 Discover Financial Services (NYSE:DFS) is 11.4% while the ROI of CNX Resources Corporation (NYSE:CNX) is -0.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DFS’s EBITDA Margin is NOT AVAILABLE whereas CNX’s is 7.42.

Both the profitability ratios suggest that Discover Financial Services (NYSE:DFS) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Discover Financial Services (NYSE:DFS) reported $2.05/share EPS for the previous quarter where analysts were predicting an EPS to be $2.05/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, CNX Resources Corporation (NYSE:CNX) reported EPS of $0.17/share in the last quarter. The analysts projected EPS of $0.2/share depicting a Surprise of -15 Percent.

Taking a look at Earnings per Share, Discover Financial Services tends to be beating the analyst estimates more than CNX Resources Corporation. so DFS is more profitable than CNX.

Technical Analysis of Discover Financial Services & CNX Resources Corporation

Moving average convergence divergence (MACD) shows that Discover Financial Services (NYSE:DFS) is on a PRICE RELATIVITY trend While CNX Resources Corporation (NYSE:CNX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Discover Financial Services was in BEARISH territory and CNX Resources Corporation was in BULLISH territory.

DFS’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While CNX’s candle is BULLISH with HIGH.

EPS Growth Rate: DFS’s 17.5% versus CNX’s 35.7%

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 Discover Financial Services (NYSE:DFS) is predicted at 17.5% while CNX Resources Corporation (NYSE:CNX) stands at 35.7%. These numbers suggest that CNX 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 DFS stands at 0 while CNX is at 0.6 whereas the debt ratio of the prior is 2.58 while the debt ratio of the later is 0.51.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

Analyst Recommendations

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 for DFS and 2.3 for CNX which means DFS has Buy rating whereas CNX 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 DFS is $88.27 which is 21.19% of its current price while CNX has price target of 19.87 which is 21.64% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

DFS currently has price to earning P/E ratio of 8.59 whereas CNX has 4.02 while the forward P/E ratio for the prior stands at 8.04 and for the later it depicts the value of 17.05.

The price to Book P/B for DFS is 2.27, Price to Sale is at 2.31 and for CNX these ratios stand at 0.76 and 2.19.