The shares of DowDuPont Inc. (NYSE:DWDP) and J P Morgan Chase & Co (NYSE:JPM) were among the active stocks of the last trading sessions. DowDuPont Inc. (NYSE:DWDP) declined to -0.65% closing at the price of $59.44 whereas the shares of J P Morgan Chase & Co (NYSE:JPM) soared 0.81% with the increase of 0.9 points closing at the price of $112.38. DowDuPont Inc. has currently decrease -11.19% in its stock over the period of 6-months while its rival J P Morgan Chase & Co subtracted -1.3% 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 DowDuPont Inc. (NYSE:DWDP) is 0.7% while the ROI of J P Morgan Chase & Co (NYSE:JPM) is 6.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DWDP’s EBITDA Margin is 9.62 whereas JPM’s is NOT AVAILABLE.
Both the profitability ratios suggest that J P Morgan Chase & Co (NYSE:JPM) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
DowDuPont Inc. (NYSE:DWDP) reported $0.74/share EPS for the previous quarter where analysts were predicting an EPS to be $0.71/share Thus beating the analyst Estimates with a Surprise Factor of 4.2 Percent. While, J P Morgan Chase & Co (NYSE:JPM) reported EPS of $2.34/share in the last quarter. The analysts projected EPS of $2.25/share depicting a Surprise of 4 Percent.
Taking a look at Earnings per Share, DowDuPont Inc. tends to be beating the analyst estimates more than J P Morgan Chase & Co. so DWDP is more profitable than JPM.
Technical Analysis of DowDuPont Inc. & J P Morgan Chase & Co
Moving average convergence divergence (MACD) shows that DowDuPont Inc. (NYSE:DWDP) is on a PRICE RELATIVITY trend While J P Morgan Chase & Co (NYSE:JPM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the DowDuPont Inc. was in BULLISH territory and J P Morgan Chase & Co was in BULLISH territory.
DWDP’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While JPM’s candle is BULLISH with HIGH.
EPS Growth Rate: DWDP’s 10.92% versus JPM’s 6.39%
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 DowDuPont Inc. (NYSE:DWDP) is predicted at 10.92% while J P Morgan Chase & Co (NYSE:JPM) stands at 6.39%. These numbers suggest that DWDP 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 DWDP stands at 1.6 while JPM is at 0 whereas the debt ratio of the prior is 0.36 while the debt ratio of the later is 1.17.
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 1.9 for DWDP and 2.2 for JPM which means DWDP has Buy rating whereas JPM 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 DWDP is $78.18 which is 23.97% of its current price while JPM has price target of 122.18 which is 8.02% 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.
DWDP currently has price to earning P/E ratio of 125.93 whereas JPM has 13.04 while the forward P/E ratio for the prior stands at 12.45 and for the later it depicts the value of 11.14.
The price to Book P/B for DWDP is 1.39, Price to Sale is at 1.61 and for JPM these ratios stand at 1.64 and 5.17.