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The shares of Cenovus Energy Inc (NYSE:CVE) and Wheaton Precious Metals Corp. (NYSE:WPM) were among the active stocks of the last trading sessions. Cenovus Energy Inc (NYSE:CVE) declined to -2.44% closing at the price of $10 whereas the shares of Wheaton Precious Metals Corp. (NYSE:WPM) declined -1.62% with the decrease of -0.34 points closing at the price of $20.67. Cenovus Energy Inc has currently increase 17.23% in its stock over the period of 6-months while its rival Wheaton Precious Metals Corp. added 0.83% 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 Cenovus Energy Inc (NYSE:CVE) is 1.3% while the ROI of Wheaton Precious Metals Corp. (NYSE:WPM) is 1.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CVE’s EBITDA Margin is 14.36 whereas WPM’s is 17.74.
Both the profitability ratios suggest that Wheaton Precious Metals Corp. (NYSE:WPM) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Cenovus Energy Inc (NYSE:CVE) reported $0.56/share EPS for the previous quarter where analysts were predicting an EPS to be $0.08/share Thus beating the analyst Estimates with a Surprise Factor of 600 Percent. While, Wheaton Precious Metals Corp. (NYSE:WPM) reported EPS of $0.19/share in the last quarter. The analysts projected EPS of $0.16/share depicting a Surprise of 18.8 Percent.
Taking a look at Earnings per Share, Cenovus Energy Inc tends to be beating the analyst estimates more than Wheaton Precious Metals Corp.. so CVE is more profitable than WPM.
Technical Analysis of Cenovus Energy Inc & Wheaton Precious Metals Corp.
Moving average convergence divergence (MACD) shows that Cenovus Energy Inc (NYSE:CVE) is on a PRICE RELATIVITY trend While Wheaton Precious Metals Corp. (NYSE:WPM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Cenovus Energy Inc was in BEARISH territory and Wheaton Precious Metals Corp. was in BEARISH territory.
CVE’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While WPM’s candle is BEARISH with LOW.
EPS Growth Rate: CVE’s -7.45% versus WPM’s 6.2%
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 Cenovus Energy Inc (NYSE:CVE) is predicted at -7.45% while Wheaton Precious Metals Corp. (NYSE:WPM) stands at 6.2%. These numbers suggest that WPM 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 CVE stands at 1.2 while WPM is at 2.5 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.13.
The values of the both ratios suggest that WPM 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 2.5 for CVE and 1.7 for WPM which means CVE has Hold rating whereas WPM 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 CVE is $10.85 which is 7.83% of its current price while WPM has price target of 26.66 which is 22.47% 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.
CVE currently has price to earning P/E ratio of 0 whereas WPM has 141.58 while the forward P/E ratio for the prior stands at 13.28 and for the later it depicts the value of 29.32.
The price to Book P/B for CVE is 0.84, Price to Sale is at 0.79 and for WPM these ratios stand at 1.86 and 10.67.
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