The shares of Target Corporation (NYSE:TGT) and Occidental Petroleum Corporation (NYSE:OXY) were among the active stocks of the last trading sessions. Target Corporation (NYSE:TGT) soared to 0.97% closing at the price of $87.6 whereas the shares of Occidental Petroleum Corporation (NYSE:OXY) declined -1.48% with the decrease of -1.09 points closing at the price of $72.63. Target Corporation has currently increase 24.7% in its stock over the period of 6-months while its rival Occidental Petroleum Corporation subtracted -14.52% 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 Target Corporation (NYSE:TGT) is 13.2% while the ROI of Occidental Petroleum Corporation (NYSE:OXY) is 2.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, TGT’s EBITDA Margin is 8.14 whereas OXY’s is 9.22.
Both the profitability ratios suggest a mixed sentiment for Target Corporation (NYSE:TGT) and Occidental Petroleum Corporation (NYSE:OXY).
EPS & Surprise Factor
Target Corporation (NYSE:TGT) reported $1.47/share EPS for the previous quarter where analysts were predicting an EPS to be $1.4/share Thus beating the analyst Estimates with a Surprise Factor of 5 Percent. While, Occidental Petroleum Corporation (NYSE:OXY) reported EPS of $1.77/share in the last quarter. The analysts projected EPS of $1.54/share depicting a Surprise of 14.9 Percent.
Taking a look at Earnings per Share, Occidental Petroleum Corporation tends to be beating the analyst estimates more than Target Corporation. so OXY is more profitable than TGT.
Technical Analysis of Target Corporation & Occidental Petroleum Corporation
Moving average convergence divergence (MACD) shows that Target Corporation (NYSE:TGT) is on a PRICE RELATIVITY trend While Occidental Petroleum Corporation (NYSE:OXY) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Target Corporation was in BULLISH territory and Occidental Petroleum Corporation was in BULLISH territory.
TGT’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While OXY’s candle is BEARISH with HIGH.
EPS Growth Rate: TGT’s 8% versus OXY’s 65.67%
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 Target Corporation (NYSE:TGT) is predicted at 8% while Occidental Petroleum Corporation (NYSE:OXY) stands at 65.67%. These numbers suggest that OXY 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 TGT stands at 0.8 while OXY is at 1.4 whereas the debt ratio of the prior is 1 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 2.6 for TGT and 2 for OXY which means TGT has Hold rating whereas OXY 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 TGT is $89.82 which is 2.47% of its current price while OXY has price target of 94.18 which is 22.88% 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.
TGT currently has price to earning P/E ratio of 17.53 whereas OXY has 25.07 while the forward P/E ratio for the prior stands at 15.5 and for the later it depicts the value of 12.02.
The price to Book P/B for TGT is 4.17, Price to Sale is at 0.63 and for OXY these ratios stand at 2.66 and 3.81.