The shares of Aramark (NYSE:ARMK) and Vector Group Ltd. (NYSE:VGR) were among the active stocks of the last trading sessions. Aramark (NYSE:ARMK) soared to 0.56% closing at the price of $36.23 whereas the shares of Vector Group Ltd. (NYSE:VGR) soared 3.07% with the increase of 0.42 points closing at the price of $14.09. Aramark has currently decrease -4.66% in its stock over the period of 6-months while its rival Vector Group Ltd. subtracted -23.38% 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 Aramark (NYSE:ARMK) is 8.6% while the ROI of Vector Group Ltd. (NYSE:VGR) is 21%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ARMK’s EBITDA Margin is 12.55 whereas VGR’s is 10.87.
Both the profitability ratios suggest a mixed sentiment for Aramark (NYSE:ARMK) and Vector Group Ltd. (NYSE:VGR).
EPS & Surprise Factor
Aramark (NYSE:ARMK) reported $0.48/share EPS for the previous quarter where analysts were predicting an EPS to be $0.47/share Thus beating the analyst Estimates with a Surprise Factor of 2.1 Percent. While, Vector Group Ltd. (NYSE:VGR) reported EPS of $0.14/share in the last quarter. The analysts projected EPS of $0.11/share depicting a Surprise of 27.3 Percent.
Taking a look at Earnings per Share, Vector Group Ltd. tends to be beating the analyst estimates more than Aramark. so VGR is more profitable than ARMK.
Technical Analysis of Aramark & Vector Group Ltd.
Moving average convergence divergence (MACD) shows that Aramark (NYSE:ARMK) is on a PRICE RELATIVITY trend While Vector Group Ltd. (NYSE:VGR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Aramark was in BULLISH territory and Vector Group Ltd. was in BULLISH territory.
ARMK’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While VGR’s candle is BULLISH with HIGH.
EPS Growth Rate: ARMK’s 14.16% versus VGR’s 11%
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 Aramark (NYSE:ARMK) is predicted at 14.16% while Vector Group Ltd. (NYSE:VGR) stands at 11%. These numbers suggest that ARMK 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 ARMK stands at 1.4 while VGR is at 1.4 whereas the debt ratio of the prior is 2.77 while the debt ratio of the later is 0.
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 2.2 for ARMK and 3 for VGR which means ARMK has Hold rating whereas VGR 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 ARMK is $48.3 which is 24.99% of its current price while VGR has price target of 25.71 which is 45.2% 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.
ARMK currently has price to earning P/E ratio of 28.37 whereas VGR has 35.67 while the forward P/E ratio for the prior stands at 14.2 and for the later it depicts the value of 20.72.
The price to Book P/B for ARMK is 3.13, Price to Sale is at 0.59 and for VGR these ratios stand at 0 and 1.1.