The shares of CSX Corporation (NASDAQ:CSX) and Cenovus Energy Inc (NYSE:CVE) were among the active stocks of the last trading sessions. CSX Corporation (NASDAQ:CSX) declined to -0.89% closing at the price of $71.67 whereas the shares of Cenovus Energy Inc (NYSE:CVE) declined -0.11% with the decrease of -0.01 points closing at the price of $9.18. CSX Corporation has currently increase 13.6% in its stock over the period of 6-months while its rival Cenovus Energy Inc subtracted -16.09% 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 CSX Corporation (NASDAQ:CSX) is 9.4% while the ROI of Cenovus Energy Inc (NYSE:CVE) is 1.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CSX’s EBITDA Margin is 11.55 whereas CVE’s is 11.55.
Both the profitability ratios suggest a mixed sentiment for CSX Corporation (NASDAQ:CSX) and Cenovus Energy Inc (NYSE:CVE).
EPS & Surprise Factor
CSX Corporation (NASDAQ:CSX) reported $1.05/share EPS for the previous quarter where analysts were predicting an EPS to be $0.95/share Thus beating the analyst Estimates with a Surprise Factor of 10.5 Percent. While, Cenovus Energy Inc (NYSE:CVE) reported EPS of $0.56/share in the last quarter. The analysts projected EPS of $0.08/share depicting a Surprise of 600 Percent.
Taking a look at Earnings per Share, Cenovus Energy Inc tends to be beating the analyst estimates more than CSX Corporation. so CVE is more profitable than CSX.
Technical Analysis of CSX Corporation & Cenovus Energy Inc
Moving average convergence divergence (MACD) shows that CSX Corporation (NASDAQ:CSX) is on a PRICE RELATIVITY trend While Cenovus Energy Inc (NYSE:CVE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the CSX Corporation was in BULLISH territory and Cenovus Energy Inc was in BULLISH territory.
CSX’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While CVE’s candle is BULLISH with HIGH.
EPS Growth Rate: CSX’s 22.7% versus CVE’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 CSX Corporation (NASDAQ:CSX) is predicted at 22.7% while Cenovus Energy Inc (NYSE:CVE) stands at 0%. These numbers suggest that CSX 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 CSX stands at 1.4 while CVE is at 1.2 whereas the debt ratio of the prior is 1 while the debt ratio of the later is 0.
The values of the both ratios suggest that CSX 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 2.2 for CSX and 2.5 for CVE which means CSX has Hold rating whereas CVE 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 CSX is $81.57 which is 12.14% of its current price while CVE has price target of 10.85 which is 15.39% 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.
CSX currently has price to earning P/E ratio of 20.22 whereas CVE has 0 while the forward P/E ratio for the prior stands at 16.95 and for the later it depicts the value of 12.68.
The price to Book P/B for CSX is 4.44, Price to Sale is at 5.09 and for CVE these ratios stand at 0.78 and 0.74.