The shares of California Resources Corporation (NYSE:CRC) and Alphabet Inc. (NASDAQ:GOOGL) were among the active stocks of the last trading sessions. California Resources Corporation (NYSE:CRC) soared to 2.88% closing at the price of $29.34 whereas the shares of Alphabet Inc. (NASDAQ:GOOGL) soared 3.62% with the increase of 38.67 points closing at the price of $1108.24. California Resources Corporation has currently decrease -11.25% in its stock over the period of 6-months while its rival Alphabet Inc. added 0.25% 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 California Resources Corporation (NYSE:CRC) is 1.5% while the ROI of Alphabet Inc. (NASDAQ:GOOGL) is 13.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CRC’s EBITDA Margin is 9.1 whereas GOOGL’s is 17.73.
Both the profitability ratios suggest that Alphabet Inc. (NASDAQ:GOOGL) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
California Resources Corporation (NYSE:CRC) reported $0.81/share EPS for the previous quarter where analysts were predicting an EPS to be $0.36/share Thus beating the analyst Estimates with a Surprise Factor of 125 Percent. While, Alphabet Inc. (NASDAQ:GOOGL) reported EPS of $13.06/share in the last quarter. The analysts projected EPS of $10.42/share depicting a Surprise of 25.3 Percent.
Taking a look at Earnings per Share, California Resources Corporation tends to be beating the analyst estimates more than Alphabet Inc.. so CRC is more profitable than GOOGL.
Technical Analysis of California Resources Corporation & Alphabet Inc.
Moving average convergence divergence (MACD) shows that California Resources Corporation (NYSE:CRC) is on a PRICE RELATIVITY trend While Alphabet Inc. (NASDAQ:GOOGL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the California Resources Corporation was in BEARISH territory and Alphabet Inc. was in BULLISH territory.
CRC’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While GOOGL’s candle is BULLISH with HIGH.
EPS Growth Rate: CRC’s 0% versus GOOGL’s 15.22%
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 California Resources Corporation (NYSE:CRC) is predicted at 0% while Alphabet Inc. (NASDAQ:GOOGL) stands at 15.22%. These numbers suggest that GOOGL 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 CRC stands at 0.6 while GOOGL is at 4.1 whereas the debt ratio of the prior is 0 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 2.4 for CRC and 1.7 for GOOGL which means CRC has Hold rating whereas GOOGL 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 CRC is $50.57 which is 41.98% of its current price while GOOGL has price target of 1352.75 which is 18.08% 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.
CRC currently has price to earning P/E ratio of 0 whereas GOOGL has 27.77 while the forward P/E ratio for the prior stands at 7.75 and for the later it depicts the value of 23.6.
The price to Book P/B for CRC is 0, Price to Sale is at 0.73 and for GOOGL these ratios stand at 4.54 and 5.97.