The shares of Exxon Mobil Corporation (NYSE:XOM) and Micron Technology, Inc. (NASDAQ:MU) were among the active stocks of the last trading sessions. Exxon Mobil Corporation (NYSE:XOM) declined to -1.59% closing at the price of $81.71 whereas the shares of Micron Technology, Inc. (NASDAQ:MU) declined -1.2% with the decrease of -0.49 points closing at the price of $40.44. Exxon Mobil Corporation has currently increase 0.53% in its stock over the period of 6-months while its rival Micron Technology, Inc. subtracted -21.96% 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 Exxon Mobil Corporation (NYSE:XOM) is 3.2% while the ROI of Micron Technology, Inc. (NASDAQ:MU) is 38.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, XOM’s EBITDA Margin is 10.37 whereas MU’s is 2.17.
Both the profitability ratios suggest a mixed sentiment for Exxon Mobil Corporation (NYSE:XOM) and Micron Technology, Inc. (NASDAQ:MU).
EPS & Surprise Factor
Exxon Mobil Corporation (NYSE:XOM) reported $1.46/share EPS for the previous quarter where analysts were predicting an EPS to be $1.23/share Thus beating the analyst Estimates with a Surprise Factor of 18.7 Percent. While, Micron Technology, Inc. (NASDAQ:MU) reported EPS of $3.53/share in the last quarter. The analysts projected EPS of $3.34/share depicting a Surprise of 5.7 Percent.
Taking a look at Earnings per Share, Exxon Mobil Corporation tends to be beating the analyst estimates more than Micron Technology, Inc.. so XOM is more profitable than MU.
Technical Analysis of Exxon Mobil Corporation & Micron Technology, Inc.
Moving average convergence divergence (MACD) shows that Exxon Mobil Corporation (NYSE:XOM) is on a PRICE RELATIVITY trend While Micron Technology, Inc. (NASDAQ:MU) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Exxon Mobil Corporation was in BULLISH territory and Micron Technology, Inc. was in BULLISH territory.
XOM’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While MU’s candle is BEARISH with HIGH.
EPS Growth Rate: XOM’s 23.76% versus MU’s 24.95%
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 Exxon Mobil Corporation (NYSE:XOM) is predicted at 23.76% while Micron Technology, Inc. (NASDAQ:MU) stands at 24.95%. These numbers suggest that MU 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 XOM stands at 0.8 while MU is at 2.8 whereas the debt ratio of the prior is 0.22 while the debt ratio of the later is 0.14.
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 2.8 for XOM and 2.1 for MU which means XOM has Hold rating whereas MU 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 XOM is $89.85 which is 9.06% of its current price while MU has price target of 66.58 which is 39.26% 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.
XOM currently has price to earning P/E ratio of 23.25 whereas MU has 3.56 while the forward P/E ratio for the prior stands at 14 and for the later it depicts the value of 4.16.
The price to Book P/B for XOM is 1.86, Price to Sale is at 1.38 and for MU these ratios stand at 1.45 and 1.5.