Which Stock is more profitable? UnitedHealth Group Incorporated (UNH) or TherapeuticsMD, Inc. (TXMD)

The shares of UnitedHealth Group Incorporated (NYSE:UNH) and TherapeuticsMD, Inc. (NASDAQ:TXMD) were among the active stocks of the last trading sessions. UnitedHealth Group Incorporated (NYSE:UNH) soared to 0.74% closing at the price of $276.65 whereas the shares of TherapeuticsMD, Inc. (NASDAQ:TXMD) soared 6.42% with the increase of 0.3 points closing at the price of $4.97. UnitedHealth Group Incorporated has currently increase 16.1% in its stock over the period of 6-months while its rival TherapeuticsMD, Inc. subtracted -17.85% 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 UnitedHealth Group Incorporated (NYSE:UNH) is 13.6% while the ROI of TherapeuticsMD, Inc. (NASDAQ:TXMD) is -59.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, UNH’s EBITDA Margin is 15.12 whereas TXMD’s is -11.54.

Both the profitability ratios suggest that UnitedHealth Group Incorporated (NYSE:UNH) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

UnitedHealth Group Incorporated (NYSE:UNH) reported $3.41/share EPS for the previous quarter where analysts were predicting an EPS to be $3.29/share Thus beating the analyst Estimates with a Surprise Factor of 3.6 Percent. While, TherapeuticsMD, Inc. (NASDAQ:TXMD) reported EPS of $-0.16/share in the last quarter. The analysts projected EPS of $-0.21/share depicting a Surprise of 23.8 Percent.

Taking a look at Earnings per Share, TherapeuticsMD, Inc. tends to be beating the analyst estimates more than UnitedHealth Group Incorporated. so TXMD is more profitable than UNH.

Technical Analysis of UnitedHealth Group Incorporated & TherapeuticsMD, Inc.

Moving average convergence divergence (MACD) shows that UnitedHealth Group Incorporated (NYSE:UNH) is on a PRICE RELATIVITY trend While TherapeuticsMD, Inc. (NASDAQ:TXMD) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the UnitedHealth Group Incorporated was in BULLISH territory and TherapeuticsMD, Inc. was in BEARISH territory.

UNH’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While TXMD’s candle is BULLISH with HIGH.

EPS Growth Rate: UNH’s 15.8% versus TXMD’s 15%

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 UnitedHealth Group Incorporated (NYSE:UNH) is predicted at 15.8% while TherapeuticsMD, Inc. (NASDAQ:TXMD) stands at 15%. These numbers suggest that UNH 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 UNH stands at 0 while TXMD is at 7.9 whereas the debt ratio of the prior is 0.73 while the debt ratio of the later is 0.94.

The values of the both ratios suggest that TXMD is more suitable investment when the liquidity and risk is the main concern.

Analyst Recommendations

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 1.6 for UNH and 1.6 for TXMD which means UNH has Buy rating whereas TXMD 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 UNH is $305.36 which is 9.4% of its current price while TXMD has price target of 16 which is 68.94% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

UNH currently has price to earning P/E ratio of 23.99 whereas TXMD has 0 while the forward P/E ratio for the prior stands at 18.99 and for the later it depicts the value of 0.

The price to Book P/B for UNH is 5.51, Price to Sale is at 1.21 and for TXMD these ratios stand at 13.81 and 71.65.