The shares of Sirius XM Holdings Inc. (NASDAQ:SIRI) and Marathon Oil Corporation (NYSE:MRO) were among the active stocks of the last trading sessions. Sirius XM Holdings Inc. (NASDAQ:SIRI) declined to -1.43% closing at the price of $6.21 whereas the shares of Marathon Oil Corporation (NYSE:MRO) declined -2.49% with the decrease of -0.46 points closing at the price of $18.05. Sirius XM Holdings Inc. has currently decrease -8.54% in its stock over the period of 6-months while its rival Marathon Oil Corporation subtracted -14.05% 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 Sirius XM Holdings Inc. (NASDAQ:SIRI) is 22.3% while the ROI of Marathon Oil Corporation (NYSE:MRO) is -3.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SIRI’s EBITDA Margin is 16.33 whereas MRO’s is 6.85.
Both the profitability ratios suggest that Sirius XM Holdings Inc. (NASDAQ:SIRI) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Sirius XM Holdings Inc. (NASDAQ:SIRI) reported $0.07/share EPS for the previous quarter where analysts were predicting an EPS to be $0.06/share Thus beating the analyst Estimates with a Surprise Factor of 16.7 Percent. While, Marathon Oil Corporation (NYSE:MRO) reported EPS of $0.24/share in the last quarter. The analysts projected EPS of $0.21/share depicting a Surprise of 14.3 Percent.
Taking a look at Earnings per Share, Sirius XM Holdings Inc. tends to be beating the analyst estimates more than Marathon Oil Corporation. so SIRI is more profitable than MRO.
Technical Analysis of Sirius XM Holdings Inc. & Marathon Oil Corporation
Moving average convergence divergence (MACD) shows that Sirius XM Holdings Inc. (NASDAQ:SIRI) is on a PRICE RELATIVITY trend While Marathon Oil Corporation (NYSE:MRO) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Sirius XM Holdings Inc. was in BULLISH territory and Marathon Oil Corporation was in BEARISH territory.
SIRI’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While MRO’s candle is BEARISH with MEDIUM.
EPS Growth Rate: SIRI’s 22.29% versus MRO’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 Sirius XM Holdings Inc. (NASDAQ:SIRI) is predicted at 22.29% while Marathon Oil Corporation (NYSE:MRO) stands at 0%. These numbers suggest that SIRI 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 SIRI stands at 0.2 while MRO is at 1.5 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.
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 2.7 for SIRI and 2 for MRO which means SIRI has Hold rating whereas MRO 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 SIRI is $6.86 which is 9.48% of its current price while MRO has price target of 26 which is 30.58% 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.
SIRI currently has price to earning P/E ratio of 26.54 whereas MRO has 0 while the forward P/E ratio for the prior stands at 22.42 and for the later it depicts the value of 13.67.
The price to Book P/B for SIRI is 0, Price to Sale is at 4.86 and for MRO these ratios stand at 1.27 and 2.9.