The shares of Dollar General Corporation (NYSE:DG) and HCA Healthcare, Inc. (NYSE:HCA) were among the active stocks of the last trading sessions. Dollar General Corporation (NYSE:DG) soared to 1.37% closing at the price of $117.53 whereas the shares of HCA Healthcare, Inc. (NYSE:HCA) declined -0.01% with the decrease of -0.02 points closing at the price of $141.63. Dollar General Corporation has currently increase 25.54% in its stock over the period of 6-months while its rival HCA Healthcare, Inc. added 39.15% 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 Dollar General Corporation (NYSE:DG) is 14.6% while the ROI of HCA Healthcare, Inc. (NYSE:HCA) is 17.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DG’s EBITDA Margin is 12.67 whereas HCA’s is 9.4.
Both the profitability ratios suggest a mixed sentiment for Dollar General Corporation (NYSE:DG) and HCA Healthcare, Inc. (NYSE:HCA).
EPS & Surprise Factor
Dollar General Corporation (NYSE:DG) reported $1.52/share EPS for the previous quarter where analysts were predicting an EPS to be $1.49/share Thus beating the analyst Estimates with a Surprise Factor of 2 Percent. While, HCA Healthcare, Inc. (NYSE:HCA) reported EPS of $2.16/share in the last quarter. The analysts projected EPS of $1.9/share depicting a Surprise of 13.7 Percent.
Taking a look at Earnings per Share, HCA Healthcare, Inc. tends to be beating the analyst estimates more than Dollar General Corporation. so HCA is more profitable than DG.
Technical Analysis of Dollar General Corporation & HCA Healthcare, Inc.
Moving average convergence divergence (MACD) shows that Dollar General Corporation (NYSE:DG) is on a PRICE RELATIVITY trend While HCA Healthcare, Inc. (NYSE:HCA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Dollar General Corporation was in BULLISH territory and HCA Healthcare, Inc. was in BULLISH territory.
DG’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While HCA’s candle is BEARISH with HIGH.
EPS Growth Rate: DG’s 14.66% versus HCA’s 15.25%
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 Dollar General Corporation (NYSE:DG) is predicted at 14.66% while HCA Healthcare, Inc. (NYSE:HCA) stands at 15.25%. These numbers suggest that HCA 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 DG stands at 1.5 while HCA is at 1.4 whereas the debt ratio of the prior is 0.44 while the debt ratio of the later is 0.
The values of the both ratios suggest that DG 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 2.1 for DG and 2.1 for HCA which means DG has Hold rating whereas HCA 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 DG is $116.36 which is -1.01% of its current price while HCA has price target of 149.38 which is 5.19% 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.
DG currently has price to earning P/E ratio of 22.24 whereas HCA has 15.95 while the forward P/E ratio for the prior stands at 17.43 and for the later it depicts the value of 14.
The price to Book P/B for DG is 4.91, Price to Sale is at 1.28 and for HCA these ratios stand at 0 and 1.08.