The shares of Northern Oil and Gas, Inc. (NYSE:NOG) and Caterpillar, Inc. (NYSE:CAT) were among the active stocks of the last trading sessions. Northern Oil and Gas, Inc. (NYSE:NOG) declined to -5.4% closing at the price of $2.98 whereas the shares of Caterpillar, Inc. (NYSE:CAT) declined -2.75% with the decrease of -3.71 points closing at the price of $131.39. Northern Oil and Gas, Inc. has currently increase 32.44% in its stock over the period of 6-months while its rival Caterpillar, Inc. subtracted -15.16% 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 Northern Oil and Gas, Inc. (NYSE:NOG) is 12.3% while the ROI of Caterpillar, Inc. (NYSE:CAT) is 7.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NOG’s EBITDA Margin is 13.57 whereas CAT’s is 9.53.
Both the profitability ratios suggest that Northern Oil and Gas, Inc. (NYSE:NOG) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Northern Oil and Gas, Inc. (NYSE:NOG) reported $0.11/share EPS for the previous quarter where analysts were predicting an EPS to be $0.12/share Thus lagging the analyst Estimates with a Surprise Factor of -8.3 Percent. While, Caterpillar, Inc. (NYSE:CAT) reported EPS of $2.86/share in the last quarter. The analysts projected EPS of $2.85/share depicting a Surprise of 0.4 Percent.
Taking a look at Earnings per Share, Caterpillar, Inc. tends to be beating the analyst estimates more than Northern Oil and Gas, Inc.. so CAT is more profitable than NOG.
Technical Analysis of Northern Oil and Gas, Inc. & Caterpillar, Inc.
Moving average convergence divergence (MACD) shows that Northern Oil and Gas, Inc. (NYSE:NOG) is on a PRICE RELATIVITY trend While Caterpillar, Inc. (NYSE:CAT) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Northern Oil and Gas, Inc. was in BULLISH territory and Caterpillar, Inc. was in BULLISH territory.
NOG’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While CAT’s candle is BEARISH with HIGH.
EPS Growth Rate: NOG’s 5% versus CAT’s 26.35%
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 Northern Oil and Gas, Inc. (NYSE:NOG) is predicted at 5% while Caterpillar, Inc. (NYSE:CAT) stands at 26.35%. These numbers suggest that CAT 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 NOG stands at 1.7 while CAT is at 1.5 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 2.26.
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 NOG and 2.2 for CAT which means NOG has Buy rating whereas CAT 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 NOG is $5.36 which is 44.4% of its current price while CAT has price target of 156.38 which is 15.98% 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.
NOG currently has price to earning P/E ratio of 0 whereas CAT has 12.83 while the forward P/E ratio for the prior stands at 4.67 and for the later it depicts the value of 10.22.
The price to Book P/B for NOG is 0, Price to Sale is at 4.21 and for CAT these ratios stand at 4.91 and 1.45.