The shares of Targa Resources, Inc. (NYSE:TRGP) and Wheaton Precious Metals Corp. (NYSE:WPM) were among the active stocks of the last trading sessions. Targa Resources, Inc. (NYSE:TRGP) declined to -1.38% closing at the price of $52.24 whereas the shares of Wheaton Precious Metals Corp. (NYSE:WPM) declined -0.18% with the decrease of -0.03 points closing at the price of $16.38. Targa Resources, Inc. has currently increase 8.56% in its stock over the period of 6-months while its rival Wheaton Precious Metals Corp. subtracted -25.07% 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 Targa Resources, Inc. (NYSE:TRGP) is -0.1% while the ROI of Wheaton Precious Metals Corp. (NYSE:WPM) is 1.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, TRGP’s EBITDA Margin is 15.85 whereas WPM’s is 15.02.
Both the profitability ratios suggest a mixed sentiment for Targa Resources, Inc. (NYSE:TRGP) and Wheaton Precious Metals Corp. (NYSE:WPM).
EPS & Surprise Factor
Targa Resources, Inc. (NYSE:TRGP) reported $-0.24/share EPS for the previous quarter where analysts were predicting an EPS to be $0.06/share Thus lagging the analyst Estimates with a Surprise Factor of -500 Percent. While, Wheaton Precious Metals Corp. (NYSE:WPM) reported EPS of $0.16/share in the last quarter. The analysts projected EPS of $0.14/share depicting a Surprise of 14.3 Percent.
Taking a look at Earnings per Share, Wheaton Precious Metals Corp. tends to be beating the analyst estimates more than Targa Resources, Inc.. so WPM is more profitable than TRGP.
Technical Analysis of Targa Resources, Inc. & Wheaton Precious Metals Corp.
Moving average convergence divergence (MACD) shows that Targa Resources, Inc. (NYSE:TRGP) is on a PRICE RELATIVITY trend While Wheaton Precious Metals Corp. (NYSE:WPM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Targa Resources, Inc. was in BULLISH territory and Wheaton Precious Metals Corp. was in BULLISH territory.
TRGP’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While WPM’s candle is BULLISH with MEDIUM.
EPS Growth Rate: TRGP’s 10.9% versus WPM’s 6.61%
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 Targa Resources, Inc. (NYSE:TRGP) is predicted at 10.9% while Wheaton Precious Metals Corp. (NYSE:WPM) stands at 6.61%. These numbers suggest that TRGP 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 TRGP stands at 0.7 while WPM is at 4.8 whereas the debt ratio of the prior is 0.9 while the debt ratio of the later is 0.18.
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 for TRGP and 1.8 for WPM which means TRGP has Buy rating whereas WPM has Buy 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 TRGP is $61.14 which is 14.56% of its current price while WPM has price target of 26.44 which is 38.05% 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.
TRGP currently has price to earning P/E ratio of 0 whereas WPM has 23.07 while the forward P/E ratio for the prior stands at 86.49 and for the later it depicts the value of 27.48.
The price to Book P/B for TRGP is 1.86, Price to Sale is at 1.24 and for WPM these ratios stand at 1.39 and 8.5.