The shares of WPX Energy, Inc. (NYSE:WPX) and Walmart Inc. (NYSE:WMT) were among the active stocks of the last trading sessions. WPX Energy, Inc. (NYSE:WPX) declined to -5.29% closing at the price of $15.58 whereas the shares of Walmart Inc. (NYSE:WMT) soared 0.54% with the increase of 0.56 points closing at the price of $104.88. WPX Energy, Inc. has currently decrease -15.05% in its stock over the period of 6-months while its rival Walmart Inc. added 25.79% 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 WPX Energy, Inc. (NYSE:WPX) is 1.3% while the ROI of Walmart Inc. (NYSE:WMT) is 10.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WPX’s EBITDA Margin is 19.63 whereas WMT’s is 10.03.
Both the profitability ratios suggest a mixed sentiment for WPX Energy, Inc. (NYSE:WPX) and Walmart Inc. (NYSE:WMT).
EPS & Surprise Factor
WPX Energy, Inc. (NYSE:WPX) reported $0.07/share EPS for the previous quarter where analysts were predicting an EPS to be $0.09/share Thus lagging the analyst Estimates with a Surprise Factor of -22.2 Percent. While, Walmart Inc. (NYSE:WMT) reported EPS of $1.29/share in the last quarter. The analysts projected EPS of $1.22/share depicting a Surprise of 5.7 Percent.
Taking a look at Earnings per Share, Walmart Inc. tends to be beating the analyst estimates more than WPX Energy, Inc.. so WMT is more profitable than WPX.
Technical Analysis of WPX Energy, Inc. & Walmart Inc.
Moving average convergence divergence (MACD) shows that WPX Energy, Inc. (NYSE:WPX) is on a PRICE RELATIVITY trend While Walmart Inc. (NYSE:WMT) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the WPX Energy, Inc. was in BULLISH territory and Walmart Inc. was in BULLISH territory.
WPX’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While WMT’s candle is BULLISH with HIGH.
EPS Growth Rate: WPX’s 0% versus WMT’s 4.17%
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 WPX Energy, Inc. (NYSE:WPX) is predicted at 0% while Walmart Inc. (NYSE:WMT) stands at 4.17%. These numbers suggest that WMT 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 WPX stands at 0.5 while WMT is at 0.9 whereas the debt ratio of the prior is 0.57 while the debt ratio of the later is 0.7.
The values of the both ratios suggest that WMT 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 1.7 for WPX and 2.3 for WMT which means WPX has Buy rating whereas WMT 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 WPX is $26.63 which is 41.49% of its current price while WMT has price target of 105.39 which is 0.48% 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.
WPX currently has price to earning P/E ratio of 0 whereas WMT has 62.88 while the forward P/E ratio for the prior stands at 16.15 and for the later it depicts the value of 22.41.
The price to Book P/B for WPX is 1.64, Price to Sale is at 4.33 and for WMT these ratios stand at 4.34 and 0.6.