The shares of Celanese Corporation (NYSE:CE) and Sempra Energy (NYSE:SRE) were among the active stocks of the last trading sessions. Celanese Corporation (NYSE:CE) declined to -1.31% closing at the price of $104.92 whereas the shares of Sempra Energy (NYSE:SRE) soared 0.35% with the increase of 0.41 points closing at the price of $117.97. Celanese Corporation has currently decrease -2.9% in its stock over the period of 6-months while its rival Sempra Energy added 10.17% 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 Celanese Corporation (NYSE:CE) is 11.9% while the ROI of Sempra Energy (NYSE:SRE) is 4.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CE’s EBITDA Margin is 9.76 whereas SRE’s is 16.18.
Both the profitability ratios suggest a mixed sentiment for Celanese Corporation (NYSE:CE) and Sempra Energy (NYSE:SRE).
EPS & Surprise Factor
Celanese Corporation (NYSE:CE) reported $2.96/share EPS for the previous quarter where analysts were predicting an EPS to be $2.74/share Thus beating the analyst Estimates with a Surprise Factor of 8 Percent. While, Sempra Energy (NYSE:SRE) reported EPS of $1.23/share in the last quarter. The analysts projected EPS of $1.13/share depicting a Surprise of 8.8 Percent.
Taking a look at Earnings per Share, Sempra Energy tends to be beating the analyst estimates more than Celanese Corporation. so SRE is more profitable than CE.
Technical Analysis of Celanese Corporation & Sempra Energy
Moving average convergence divergence (MACD) shows that Celanese Corporation (NYSE:CE) is on a PRICE RELATIVITY trend While Sempra Energy (NYSE:SRE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Celanese Corporation was in BULLISH territory and Sempra Energy was in BULLISH territory.
CE’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While SRE’s candle is BULLISH with HIGH.
EPS Growth Rate: CE’s 17.73% versus SRE’s 9.29%
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 Celanese Corporation (NYSE:CE) is predicted at 17.73% while Sempra Energy (NYSE:SRE) stands at 9.29%. These numbers suggest that CE 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 CE stands at 2.1 while SRE is at 0.6 whereas the debt ratio of the prior is 0.97 while the debt ratio of the later is 1.85.
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 2.1 for CE and 1.8 for SRE which means CE has Hold rating whereas SRE 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 CE is $127.78 which is 17.89% of its current price while SRE has price target of 124.45 which is 5.21% 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.
CE currently has price to earning P/E ratio of 10.21 whereas SRE has 128.65 while the forward P/E ratio for the prior stands at 9.38 and for the later it depicts the value of 19.54.
The price to Book P/B for CE is 3.99, Price to Sale is at 2 and for SRE these ratios stand at 2.22 and 2.92.