The shares of T-Mobile US, Inc. (NASDAQ:TMUS) and Unum Group (NYSE:UNM) were among the active stocks of the last trading sessions. T-Mobile US, Inc. (NASDAQ:TMUS) declined to -0.84% closing at the price of $69.75 whereas the shares of Unum Group (NYSE:UNM) soared 0.26% with the increase of 0.1 points closing at the price of $38.15. T-Mobile US, Inc. has currently increase 23.69% in its stock over the period of 6-months while its rival Unum Group added 0.53% 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 T-Mobile US, Inc. (NASDAQ:TMUS) is 7.6% while the ROI of Unum Group (NYSE:UNM) is 9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, TMUS’s EBITDA Margin is 8.02 whereas UNM’s is 5.74.
Both the profitability ratios suggest a mixed sentiment for T-Mobile US, Inc. (NASDAQ:TMUS) and Unum Group (NYSE:UNM).
EPS & Surprise Factor
T-Mobile US, Inc. (NASDAQ:TMUS) reported $0.93/share EPS for the previous quarter where analysts were predicting an EPS to be $0.85/share Thus beating the analyst Estimates with a Surprise Factor of 9.4 Percent. While, Unum Group (NYSE:UNM) reported EPS of $1.37/share in the last quarter. The analysts projected EPS of $1.29/share depicting a Surprise of 6.2 Percent.
Taking a look at Earnings per Share, T-Mobile US, Inc. tends to be beating the analyst estimates more than Unum Group. so TMUS is more profitable than UNM.
Technical Analysis of T-Mobile US, Inc. & Unum Group
Moving average convergence divergence (MACD) shows that T-Mobile US, Inc. (NASDAQ:TMUS) is on a PRICE RELATIVITY trend While Unum Group (NYSE:UNM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the T-Mobile US, Inc. was in BULLISH territory and Unum Group was in BULLISH territory.
TMUS’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While UNM’s candle is BULLISH with MEDIUM.
EPS Growth Rate: TMUS’s -3.1% versus UNM’s 9%
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 T-Mobile US, Inc. (NASDAQ:TMUS) is predicted at -3.1% while Unum Group (NYSE:UNM) stands at 9%. These numbers suggest that UNM 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 TMUS stands at 0.8 while UNM is at 0 whereas the debt ratio of the prior is 1.23 while the debt ratio of the later is 0.35.
The values of the both ratios suggest that TMUS 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 1.8 for TMUS and 2.7 for UNM which means TMUS has Buy rating whereas UNM 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 TMUS is $78.18 which is 10.78% of its current price while UNM has price target of 43.54 which is 12.38% 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.
TMUS currently has price to earning P/E ratio of 21.82 whereas UNM has 16.83 while the forward P/E ratio for the prior stands at 17.43 and for the later it depicts the value of 6.96.
The price to Book P/B for TMUS is 2.43, Price to Sale is at 1.4 and for UNM these ratios stand at 0.98 and 0.72.