The shares of Union Pacific Corporation (NYSE:UNP) and Diplomat Pharmacy, Inc. (NYSE:DPLO) were among the active stocks of the last trading sessions. Union Pacific Corporation (NYSE:UNP) declined to -0.31% closing at the price of $152.39 whereas the shares of Diplomat Pharmacy, Inc. (NYSE:DPLO) soared 8.45% with the increase of 1.25 points closing at the price of $16.05. Union Pacific Corporation has currently increase 7.05% in its stock over the period of 6-months while its rival Diplomat Pharmacy, Inc. subtracted -31.96% 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 Union Pacific Corporation (NYSE:UNP) is 12.8% while the ROI of Diplomat Pharmacy, Inc. (NYSE:DPLO) is 1.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, UNP’s EBITDA Margin is 12.09 whereas DPLO’s is 22.66.
Both the profitability ratios suggest a mixed sentiment for Union Pacific Corporation (NYSE:UNP) and Diplomat Pharmacy, Inc. (NYSE:DPLO).
EPS & Surprise Factor
Union Pacific Corporation (NYSE:UNP) reported $2.15/share EPS for the previous quarter where analysts were predicting an EPS to be $2.1/share Thus beating the analyst Estimates with a Surprise Factor of 2.4 Percent. While, Diplomat Pharmacy, Inc. (NYSE:DPLO) reported EPS of $0.01/share in the last quarter. The analysts projected EPS of $0.22/share depicting a Surprise of -95.5 Percent.
Taking a look at Earnings per Share, Union Pacific Corporation tends to be beating the analyst estimates more than Diplomat Pharmacy, Inc.. so UNP is more profitable than DPLO.
Technical Analysis of Union Pacific Corporation & Diplomat Pharmacy, Inc.
Moving average convergence divergence (MACD) shows that Union Pacific Corporation (NYSE:UNP) is on a PRICE RELATIVITY trend While Diplomat Pharmacy, Inc. (NYSE:DPLO) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Union Pacific Corporation was in BULLISH territory and Diplomat Pharmacy, Inc. was in BEARISH territory.
UNP’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While DPLO’s candle is BULLISH with HIGH.
EPS Growth Rate: UNP’s 18.27% versus DPLO’s 19.04%
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 Union Pacific Corporation (NYSE:UNP) is predicted at 18.27% while Diplomat Pharmacy, Inc. (NYSE:DPLO) stands at 19.04%. These numbers suggest that DPLO 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 UNP stands at 1.1 while DPLO is at 0.9 whereas the debt ratio of the prior is 1.09 while the debt ratio of the later is 0.78.
The values of the both ratios suggest that UNP 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 2.4 for UNP and 2.4 for DPLO which means UNP has Hold rating whereas DPLO 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 UNP is $166.38 which is 8.41% of its current price while DPLO has price target of 25.1 which is 36.06% 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.
UNP currently has price to earning P/E ratio of 20.04 whereas DPLO has 0 while the forward P/E ratio for the prior stands at 17.01 and for the later it depicts the value of 15.21.
The price to Book P/B for UNP is 5.44, Price to Sale is at 4.99 and for DPLO these ratios stand at 1.57 and 0.24.