The shares of VEREIT Inc. (NYSE:VER) and News Corporation (NASDAQ:NWSA) were among the active stocks of the last trading sessions. VEREIT Inc. (NYSE:VER) soared to 1.06% closing at the price of $7.65 whereas the shares of News Corporation (NASDAQ:NWSA) soared 5.29% with the increase of 0.71 points closing at the price of $14.14. VEREIT Inc. has currently increase 8.36% in its stock over the period of 6-months while its rival News Corporation subtracted -6.85% 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 VEREIT Inc. (NYSE:VER) is 1.9% while the ROI of News Corporation (NASDAQ:NWSA) is -8.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, VER’s EBITDA Margin is 12.23 whereas NWSA’s is 10.16.
Both the profitability ratios suggest that VEREIT Inc. (NYSE:VER) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
VEREIT Inc. (NYSE:VER) reported $-0.09/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.01/share Thus lagging the analyst Estimates with a Surprise Factor of -800 Percent. While, News Corporation (NASDAQ:NWSA) reported EPS of $0.17/share in the last quarter. The analysts projected EPS of $0.04/share depicting a Surprise of 325 Percent.
Taking a look at Earnings per Share, News Corporation tends to be beating the analyst estimates more than VEREIT Inc.. so NWSA is more profitable than VER.
Technical Analysis of VEREIT Inc. & News Corporation
Moving average convergence divergence (MACD) shows that VEREIT Inc. (NYSE:VER) is on a PRICE RELATIVITY trend While News Corporation (NASDAQ:NWSA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the VEREIT Inc. was in BULLISH territory and News Corporation was in BULLISH territory.
VER’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While NWSA’s candle is NEUTRAL with HIGH.
EPS Growth Rate: VER’s 5% versus NWSA’s 23.3%
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 VEREIT Inc. (NYSE:VER) is predicted at 5% while News Corporation (NASDAQ:NWSA) stands at 23.3%. These numbers suggest that NWSA 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 VER stands at 0 while NWSA is at 1.3 whereas the debt ratio of the prior is 0.81 while the debt ratio of the later is 0.21.
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 2.4 for VER and 2.9 for NWSA which means VER has Hold rating whereas NWSA 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 VER is $8.36 which is 8.49% of its current price while NWSA has price target of 15.67 which is 9.76% 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.
VER currently has price to earning P/E ratio of 0 whereas NWSA has 0 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 30.21.
The price to Book P/B for VER is 0.99, Price to Sale is at 5.91 and for NWSA these ratios stand at 0.89 and 0.92.