The shares of Genworth Financial Inc (NYSE:GNW) and Apache Corporation (NYSE:APA) were among the active stocks of the last trading sessions. Genworth Financial Inc (NYSE:GNW) soared to 0.21% closing at the price of $4.71 whereas the shares of Apache Corporation (NYSE:APA) declined -4.73% with the decrease of -1.79 points closing at the price of $36.02. Genworth Financial Inc has currently increase 53.42% in its stock over the period of 6-months while its rival Apache Corporation subtracted -13.02% 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 Genworth Financial Inc (NYSE:GNW) is 4.2% while the ROI of Apache Corporation (NYSE:APA) is 10.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, GNW’s EBITDA Margin is 5.71 whereas APA’s is 5.99.
Both the profitability ratios suggest that Apache Corporation (NYSE:APA) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Genworth Financial Inc (NYSE:GNW) reported $0.29/share EPS for the previous quarter where analysts were predicting an EPS to be $0.26/share Thus beating the analyst Estimates with a Surprise Factor of 11.5 Percent. While, Apache Corporation (NYSE:APA) reported EPS of $0.63/share in the last quarter. The analysts projected EPS of $0.47/share depicting a Surprise of 34 Percent.
Taking a look at Earnings per Share, Apache Corporation tends to be beating the analyst estimates more than Genworth Financial Inc. so APA is more profitable than GNW.
Technical Analysis of Genworth Financial Inc & Apache Corporation
Moving average convergence divergence (MACD) shows that Genworth Financial Inc (NYSE:GNW) is on a PRICE RELATIVITY trend While Apache Corporation (NYSE:APA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Genworth Financial Inc was in BULLISH territory and Apache Corporation was in BULLISH territory.
GNW’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While APA’s candle is BEARISH with MEDIUM.
EPS Growth Rate: GNW’s 5% versus APA’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 Genworth Financial Inc (NYSE:GNW) is predicted at 5% while Apache Corporation (NYSE:APA) stands at 0%. These numbers suggest that GNW 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 GNW stands at 0 while APA is at 1.3 whereas the debt ratio of the prior is 0.34 while the debt ratio of the later is 1.08.
The values of the both ratios suggest that APA 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 3 for GNW and 3 for APA which means GNW has Hold rating whereas APA 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 GNW is $4.5 which is -4.67% of its current price while APA has price target of 50.8 which is 29.09% 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.
GNW currently has price to earning P/E ratio of 6.34 whereas APA has 14.21 while the forward P/E ratio for the prior stands at 4.01 and for the later it depicts the value of 15.08.
The price to Book P/B for GNW is 0.18, Price to Sale is at 0.29 and for APA these ratios stand at 1.81 and 2.14.