The shares of Morgan Stanley (NYSE:MS) and Johnson Controls International plc (NYSE:JCI) were among the active stocks of the last trading sessions. Morgan Stanley (NYSE:MS) declined to -0.39% closing at the price of $46.43 whereas the shares of Johnson Controls International plc (NYSE:JCI) soared 3.23% with the increase of 1.08 points closing at the price of $34.48. Morgan Stanley has currently decrease -15.89% in its stock over the period of 6-months while its rival Johnson Controls International plc subtracted -5.01% 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 Morgan Stanley (NYSE:MS) is 1.5% while the ROI of Johnson Controls International plc (NYSE:JCI) is 6.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MS’s EBITDA Margin is NOT AVAILABLE whereas JCI’s is 8.78.
Both the profitability ratios suggest a mixed sentiment for Morgan Stanley (NYSE:MS) and Johnson Controls International plc (NYSE:JCI).
EPS & Surprise Factor
Morgan Stanley (NYSE:MS) reported $1.17/share EPS for the previous quarter where analysts were predicting an EPS to be $1.02/share Thus beating the analyst Estimates with a Surprise Factor of 14.7 Percent. While, Johnson Controls International plc (NYSE:JCI) reported EPS of $0.93/share in the last quarter. The analysts projected EPS of $0.93/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, Morgan Stanley tends to be beating the analyst estimates more than Johnson Controls International plc. so MS is more profitable than JCI.
Technical Analysis of Morgan Stanley & Johnson Controls International plc
Moving average convergence divergence (MACD) shows that Morgan Stanley (NYSE:MS) is on a PRICE RELATIVITY trend While Johnson Controls International plc (NYSE:JCI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Morgan Stanley was in BULLISH territory and Johnson Controls International plc was in BULLISH territory.
MS’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While JCI’s candle is BULLISH with HIGH.
EPS Growth Rate: MS’s 20.6% versus JCI’s 9.26%
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 Morgan Stanley (NYSE:MS) is predicted at 20.6% while Johnson Controls International plc (NYSE:JCI) stands at 9.26%. These numbers suggest that MS 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 MS stands at 0 while JCI is at 1.1 whereas the debt ratio of the prior is 5.89 while the debt ratio of the later is 0.58.
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 for MS and 2.8 for JCI which means MS has Buy rating whereas JCI 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 MS is $58.79 which is 21.02% of its current price while JCI has price target of 39.25 which is 12.15% 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.
MS currently has price to earning P/E ratio of 9.83 whereas JCI has 13.04 while the forward P/E ratio for the prior stands at 8.93 and for the later it depicts the value of 11.38.
The price to Book P/B for MS is 1.13, Price to Sale is at 1.63 and for JCI these ratios stand at 1.54 and 1.05.