The shares of Prospect Capital Corporation (NASDAQ:PSEC) and Waste Management, Inc. (NYSE:WM) were among the active stocks of the last trading sessions. Prospect Capital Corporation (NASDAQ:PSEC) soared to 0.72% closing at the price of $7 whereas the shares of Waste Management, Inc. (NYSE:WM) soared 0.51% with the increase of 0.46 points closing at the price of $89.89. Prospect Capital Corporation has currently increase 5.74% in its stock over the period of 6-months while its rival Waste Management, Inc. added 8.34% 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 Prospect Capital Corporation (NASDAQ:PSEC) is 0% while the ROI of Waste Management, Inc. (NYSE:WM) is 19.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PSEC’s EBITDA Margin is NOT AVAILABLE whereas WM’s is 12.47.
Both the profitability ratios suggest a mixed sentiment for Prospect Capital Corporation (NASDAQ:PSEC) and Waste Management, Inc. (NYSE:WM).
EPS & Surprise Factor
Prospect Capital Corporation (NASDAQ:PSEC) reported $0.23/share EPS for the previous quarter where analysts were predicting an EPS to be $0.21/share Thus beating the analyst Estimates with a Surprise Factor of 9.5 Percent. While, Waste Management, Inc. (NYSE:WM) reported EPS of $1.15/share in the last quarter. The analysts projected EPS of $1.11/share depicting a Surprise of 3.6 Percent.
Taking a look at Earnings per Share, Prospect Capital Corporation tends to be beating the analyst estimates more than Waste Management, Inc.. so PSEC is more profitable than WM.
Technical Analysis of Prospect Capital Corporation & Waste Management, Inc.
Moving average convergence divergence (MACD) shows that Prospect Capital Corporation (NASDAQ:PSEC) is on a PRICE RELATIVITY trend While Waste Management, Inc. (NYSE:WM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Prospect Capital Corporation was in BULLISH territory and Waste Management, Inc. was in BULLISH territory.
PSEC’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While WM’s candle is BULLISH with HIGH.
EPS Growth Rate: PSEC’s 5% versus WM’s 12.87%
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 Prospect Capital Corporation (NASDAQ:PSEC) is predicted at 5% while Waste Management, Inc. (NYSE:WM) stands at 12.87%. These numbers suggest that WM 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 PSEC stands at 0 while WM is at 0.9 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.61.
The values of the both ratios suggest that WM 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 3.5 for PSEC and 2 for WM which means PSEC has Sell rating whereas WM 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 PSEC is $6 which is -16.67% of its current price while WM has price target of 96.22 which is 6.58% 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.
PSEC currently has price to earning P/E ratio of 8.43 whereas WM has 13.53 while the forward P/E ratio for the prior stands at 8.14 and for the later it depicts the value of 20.32.
The price to Book P/B for PSEC is 0.75, Price to Sale is at 3.88 and for WM these ratios stand at 6.17 and 2.64.