The shares of Aetna Inc. (NYSE:AET) and BRF S.A. (NYSE:BRFS) were among the active stocks of the last trading sessions. Aetna Inc. (NYSE:AET) soared to 0.19% closing at the price of $209.23 whereas the shares of BRF S.A. (NYSE:BRFS) declined -6.18% with the decrease of -0.37 points closing at the price of $5.62. Aetna Inc. has currently increase 19.79% in its stock over the period of 6-months while its rival BRF S.A. subtracted -16.49% 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 Aetna Inc. (NYSE:AET) is 9.9% while the ROI of BRF S.A. (NYSE:BRFS) is 3.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AET’s EBITDA Margin is 10.47 whereas BRFS’s is 19.98.
Both the profitability ratios suggest a mixed sentiment for Aetna Inc. (NYSE:AET) and BRF S.A. (NYSE:BRFS).
EPS & Surprise Factor
Aetna Inc. (NYSE:AET) reported $2.96/share EPS for the previous quarter where analysts were predicting an EPS to be $2.83/share Thus beating the analyst Estimates with a Surprise Factor of 4.6 Percent. While, BRF S.A. (NYSE:BRFS) reported EPS of $-0.25/share in the last quarter. The analysts projected EPS of $-0.14/share depicting a Surprise of -78.6 Percent.
Taking a look at Earnings per Share, Aetna Inc. tends to be beating the analyst estimates more than BRF S.A.. so AET is more profitable than BRFS.
Technical Analysis of Aetna Inc. & BRF S.A.
Moving average convergence divergence (MACD) shows that Aetna Inc. (NYSE:AET) is on a PRICE RELATIVITY trend While BRF S.A. (NYSE:BRFS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Aetna Inc. was in BULLISH territory and BRF S.A. was in BULLISH territory.
AET’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While BRFS’s candle is BEARISH with MEDIUM.
EPS Growth Rate: AET’s 10.09% versus BRFS’s 0%
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 Aetna Inc. (NYSE:AET) is predicted at 10.09% while BRF S.A. (NYSE:BRFS) stands at 0%. These numbers suggest that AET 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 AET stands at 0 while BRFS is at 1.1 whereas the debt ratio of the prior is 0.45 while the debt ratio of the later is 2.49.
The values of the both ratios suggest that BRFS 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 2.6 for AET and 2.3 for BRFS which means AET has Hold rating whereas BRFS 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 AET is $206.8 which is -1.18% of its current price while BRFS has price target of 8.48 which is 33.73% 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.
AET currently has price to earning P/E ratio of 18.33 whereas BRFS has 0 while the forward P/E ratio for the prior stands at 16.87 and for the later it depicts the value of 0.
The price to Book P/B for AET is 3.75, Price to Sale is at 1.13 and for BRFS these ratios stand at 1.87 and 0.49.