The shares of Discovery, Inc. (NASDAQ:DISCA) and First Data Corporation (NYSE:FDC) were among the active stocks of the last trading sessions. Discovery, Inc. (NASDAQ:DISCA) soared to 2.18% closing at the price of $33.8 whereas the shares of First Data Corporation (NYSE:FDC) declined -2.45% with the decrease of -0.48 points closing at the price of $19.12. Discovery, Inc. has currently increase 40.66% in its stock over the period of 6-months while its rival First Data Corporation subtracted -1.49% 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 Discovery, Inc. (NASDAQ:DISCA) is 2.3% while the ROI of First Data Corporation (NYSE:FDC) is 9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DISCA’s EBITDA Margin is 13.91 whereas FDC’s is 14.08.
Both the profitability ratios suggest that First Data Corporation (NYSE:FDC) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Discovery, Inc. (NASDAQ:DISCA) reported $0.52/share EPS for the previous quarter where analysts were predicting an EPS to be $0.59/share Thus lagging the analyst Estimates with a Surprise Factor of -11.9 Percent. While, First Data Corporation (NYSE:FDC) reported EPS of $0.35/share in the last quarter. The analysts projected EPS of $0.37/share depicting a Surprise of -5.4 Percent.
Taking a look at Earnings per Share, First Data Corporation tends to be beating the analyst estimates more than Discovery, Inc.. so FDC is more profitable than DISCA.
Technical Analysis of Discovery, Inc. & First Data Corporation
Moving average convergence divergence (MACD) shows that Discovery, Inc. (NASDAQ:DISCA) is on a PRICE RELATIVITY trend While First Data Corporation (NYSE:FDC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Discovery, Inc. was in BULLISH territory and First Data Corporation was in BEARISH territory.
DISCA’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While FDC’s candle is BEARISH with HIGH.
EPS Growth Rate: DISCA’s 7% versus FDC’s 7.96%
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 Discovery, Inc. (NASDAQ:DISCA) is predicted at 7% while First Data Corporation (NYSE:FDC) stands at 7.96%. These numbers suggest that FDC 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 DISCA stands at 1.4 while FDC is at 1 whereas the debt ratio of the prior is 2.31 while the debt ratio of the later is 4.38.
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 2.5 for DISCA and 1.7 for FDC which means DISCA has Hold rating whereas FDC 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 DISCA is $32.67 which is -3.46% of its current price while FDC has price target of 28.05 which is 31.84% 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.
DISCA currently has price to earning P/E ratio of 0 whereas FDC has 12.67 while the forward P/E ratio for the prior stands at 9.8 and for the later it depicts the value of 11.82.
The price to Book P/B for DISCA is 2.23, Price to Sale is at 2.04 and for FDC these ratios stand at 4.4 and 1.76.