Comparing Profitability of these two stocks: Allstate Corporation (The) (ALL), Analog Devices, Inc. (ADI)

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The shares of Allstate Corporation (The) (NYSE:ALL) and Analog Devices, Inc. (NASDAQ:ADI) were among the active stocks of the last trading sessions. Allstate Corporation (The) (NYSE:ALL) soared to 1.28% closing at the price of $93.7 whereas the shares of Analog Devices, Inc. (NASDAQ:ADI) soared 1.83% with the increase of 1.62 points closing at the price of $89.93. Allstate Corporation (The) has currently decrease -2.78% in its stock over the period of 6-months while its rival Analog Devices, Inc. subtracted -2.88% 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 Allstate Corporation (The) (NYSE:ALL) is 9.9% while the ROI of Analog Devices, Inc. (NASDAQ:ADI) is 5.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ALL’s EBITDA Margin is 7.33 whereas ADI’s is 13.15.

Both the profitability ratios suggest a mixed sentiment for Allstate Corporation (The) (NYSE:ALL) and Analog Devices, Inc. (NASDAQ:ADI).

EPS & Surprise Factor

Allstate Corporation (The) (NYSE:ALL) reported $1.93/share EPS for the previous quarter where analysts were predicting an EPS to be $2.21/share Thus lagging the analyst Estimates with a Surprise Factor of -12.7 Percent. While, Analog Devices, Inc. (NASDAQ:ADI) reported EPS of $1.53/share in the last quarter. The analysts projected EPS of $1.46/share depicting a Surprise of 4.8 Percent.

Taking a look at Earnings per Share, Analog Devices, Inc. tends to be beating the analyst estimates more than Allstate Corporation (The). so ADI is more profitable than ALL.

Technical Analysis of Allstate Corporation (The) & Analog Devices, Inc.

Moving average convergence divergence (MACD) shows that Allstate Corporation (The) (NYSE:ALL) is on a PRICE RELATIVITY trend While Analog Devices, Inc. (NASDAQ:ADI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Allstate Corporation (The) was in BEARISH territory and Analog Devices, Inc. was in BULLISH territory.

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

EPS Growth Rate: ALL’s 14.6% versus ADI’s 9.34%

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 Allstate Corporation (The) (NYSE:ALL) is predicted at 14.6% while Analog Devices, Inc. (NASDAQ:ADI) stands at 9.34%. These numbers suggest that ALL 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 ALL stands at 0 while ADI is at 1.6 whereas the debt ratio of the prior is 0.3 while the debt ratio of the later is 0.6.

The values of the both ratios suggest that ADI is more suitable investment when the liquidity and risk is the main concern.

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 2.3 for ALL and 2.1 for ADI which means ALL has Hold rating whereas ADI 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 ALL is $108.93 which is 13.98% of its current price while ADI has price target of 104.95 which is 14.31% 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.

ALL currently has price to earning P/E ratio of 10.7 whereas ADI has 23.99 while the forward P/E ratio for the prior stands at 10.28 and for the later it depicts the value of 15.39.

The price to Book P/B for ALL is 1.52, Price to Sale is at 0.81 and for ADI these ratios stand at 3.08 and 5.49.