The shares of Goldcorp Inc. (NYSE:GG) and Centennial Resource Development, Inc. (NASDAQ:CDEV) were among the active stocks of the last trading sessions. Goldcorp Inc. (NYSE:GG) declined to -1.37% closing at the price of $9.38 whereas the shares of Centennial Resource Development, Inc. (NASDAQ:CDEV) declined -1.24% with the decrease of -0.25 points closing at the price of $19.93. Goldcorp Inc. has currently decrease -30.36% in its stock over the period of 6-months while its rival Centennial Resource Development, Inc. subtracted -2.5% 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 Goldcorp Inc. (NYSE:GG) is 5.9% while the ROI of Centennial Resource Development, Inc. (NASDAQ:CDEV) is 2.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, GG’s EBITDA Margin is 9.21 whereas CDEV’s is 10.34.
Both the profitability ratios suggest a mixed sentiment for Goldcorp Inc. (NYSE:GG) and Centennial Resource Development, Inc. (NASDAQ:CDEV).
EPS & Surprise Factor
Goldcorp Inc. (NYSE:GG) reported $-0.08/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.01/share Thus lagging the analyst Estimates with a Surprise Factor of -700 Percent. While, Centennial Resource Development, Inc. (NASDAQ:CDEV) reported EPS of $0.17/share in the last quarter. The analysts projected EPS of $0.21/share depicting a Surprise of -19 Percent.
Taking a look at Earnings per Share, Centennial Resource Development, Inc. tends to be beating the analyst estimates more than Goldcorp Inc.. so CDEV is more profitable than GG.
Technical Analysis of Goldcorp Inc. & Centennial Resource Development, Inc.
Moving average convergence divergence (MACD) shows that Goldcorp Inc. (NYSE:GG) is on a PRICE RELATIVITY trend While Centennial Resource Development, Inc. (NASDAQ:CDEV) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Goldcorp Inc. was in BULLISH territory and Centennial Resource Development, Inc. was in BULLISH territory.
GG’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While CDEV’s candle is BULLISH with HIGH.
EPS Growth Rate: GG’s 6.33% versus CDEV’s 61.15%
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 Goldcorp Inc. (NYSE:GG) is predicted at 6.33% while Centennial Resource Development, Inc. (NASDAQ:CDEV) stands at 61.15%. These numbers suggest that CDEV 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 GG stands at 0.8 while CDEV is at 0.9 whereas the debt ratio of the prior is 0.22 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 2.3 for GG and 1.7 for CDEV which means GG has Hold rating whereas CDEV 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 GG is $14.13 which is 33.62% of its current price while CDEV has price target of 26.73 which is 25.44% 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.
GG currently has price to earning P/E ratio of 107.82 whereas CDEV has 30.57 while the forward P/E ratio for the prior stands at 21.76 and for the later it depicts the value of 15.13.
The price to Book P/B for GG is 0.59, Price to Sale is at 2.62 and for CDEV these ratios stand at 1.74 and 7.72.