The shares of Sterling Bancorp (NYSE:STL) and General Mills, Inc. (NYSE:GIS) were among the active stocks of the last trading sessions. Sterling Bancorp (NYSE:STL) soared to 0.71% closing at the price of $18.32 whereas the shares of General Mills, Inc. (NYSE:GIS) soared 1.98% with the increase of 0.85 points closing at the price of $43.82. Sterling Bancorp has currently decrease -24.61% in its stock over the period of 6-months while its rival General Mills, Inc. added 3.08% 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 Sterling Bancorp (NYSE:STL) is 11% while the ROI of General Mills, Inc. (NYSE:GIS) is 8.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, STL’s EBITDA Margin is NOT AVAILABLE whereas GIS’s is 12.63.
Both the profitability ratios suggest that Sterling Bancorp (NYSE:STL) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Sterling Bancorp (NYSE:STL) reported $0.52/share EPS for the previous quarter where analysts were predicting an EPS to be $0.52/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, General Mills, Inc. (NYSE:GIS) reported EPS of $0.71/share in the last quarter. The analysts projected EPS of $0.64/share depicting a Surprise of 10.9 Percent.
Taking a look at Earnings per Share, General Mills, Inc. tends to be beating the analyst estimates more than Sterling Bancorp. so GIS is more profitable than STL.
Technical Analysis of Sterling Bancorp & General Mills, Inc.
Moving average convergence divergence (MACD) shows that Sterling Bancorp (NYSE:STL) is on a PRICE RELATIVITY trend While General Mills, Inc. (NYSE:GIS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Sterling Bancorp was in BULLISH territory and General Mills, Inc. was in BEARISH territory.
STL’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While GIS’s candle is BULLISH with HIGH.
EPS Growth Rate: STL’s 5% versus GIS’s 5.85%
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 Sterling Bancorp (NYSE:STL) is predicted at 5% while General Mills, Inc. (NYSE:GIS) stands at 5.85%. These numbers suggest that GIS 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 STL stands at 0 while GIS is at 0.6 whereas the debt ratio of the prior is 0.11 while the debt ratio of the later is 2.51.
The values of the both ratios suggest that GIS 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 1.7 for STL and 2.7 for GIS which means STL has Buy rating whereas GIS 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 STL is $24.45 which is 25.07% of its current price while GIS has price target of 47.72 which is 8.17% 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.
STL currently has price to earning P/E ratio of 12.45 whereas GIS has 16.19 while the forward P/E ratio for the prior stands at 8.6 and for the later it depicts the value of 13.51.
The price to Book P/B for STL is 0.98, Price to Sale is at 3.5 and for GIS these ratios stand at 4.21 and 1.71.