The shares of Costco Wholesale Corporation (NASDAQ:COST) and PNC Financial Services Group, Inc. (The) (NYSE:PNC) were among the active stocks of the last trading sessions. Costco Wholesale Corporation (NASDAQ:COST) declined to -0.69% closing at the price of $238.7 whereas the shares of PNC Financial Services Group, Inc. (The) (NYSE:PNC) soared 0.72% with the increase of 0.96 points closing at the price of $134.24. Costco Wholesale Corporation has currently increase 21.94% in its stock over the period of 6-months while its rival PNC Financial Services Group, Inc. (The) subtracted -11.08% 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 Costco Wholesale Corporation (NASDAQ:COST) is 16.4% while the ROI of PNC Financial Services Group, Inc. (The) (NYSE:PNC) is 8.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, COST’s EBITDA Margin is 17.14 whereas PNC’s is NOT AVAILABLE.
Both the profitability ratios suggest a mixed sentiment for Costco Wholesale Corporation (NASDAQ:COST) and PNC Financial Services Group, Inc. (The) (NYSE:PNC).
EPS & Surprise Factor
Costco Wholesale Corporation (NASDAQ:COST) reported $2.36/share EPS for the previous quarter where analysts were predicting an EPS to be $2.36/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, PNC Financial Services Group, Inc. (The) (NYSE:PNC) reported EPS of $2.82/share in the last quarter. The analysts projected EPS of $2.72/share depicting a Surprise of 3.7 Percent.
Taking a look at Earnings per Share, PNC Financial Services Group, Inc. (The) tends to be beating the analyst estimates more than Costco Wholesale Corporation. so PNC is more profitable than COST.
Technical Analysis of Costco Wholesale Corporation & PNC Financial Services Group, Inc. (The)
Moving average convergence divergence (MACD) shows that Costco Wholesale Corporation (NASDAQ:COST) is on a PRICE RELATIVITY trend While PNC Financial Services Group, Inc. (The) (NYSE:PNC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Costco Wholesale Corporation was in BULLISH territory and PNC Financial Services Group, Inc. (The) was in BULLISH territory.
COST’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While PNC’s candle is BULLISH with HIGH.
EPS Growth Rate: COST’s 11.58% versus PNC’s 10.15%
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 Costco Wholesale Corporation (NASDAQ:COST) is predicted at 11.58% while PNC Financial Services Group, Inc. (The) (NYSE:PNC) stands at 10.15%. These numbers suggest that COST 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 COST stands at 1 while PNC is at 0 whereas the debt ratio of the prior is 0.51 while the debt ratio of the later is 0.81.
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 2.1 for COST and 2.3 for PNC which means COST has Hold rating whereas PNC 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 COST is $244.52 which is 2.38% of its current price while PNC has price target of 150.48 which is 10.79% 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.
COST currently has price to earning P/E ratio of 33.44 whereas PNC has 13.86 while the forward P/E ratio for the prior stands at 28.29 and for the later it depicts the value of 11.68.
The price to Book P/B for COST is 8.17, Price to Sale is at 0.74 and for PNC these ratios stand at 1.33 and 5.17.