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The shares of Philip Morris International Inc. (NYSE: PM) have fallen by more than -22.46% this year and have recently decreased by -0.92% or -0.76 $ to establish at $ 81.92. Newmont Mining Corporation (NYSE: NEM), on the other hand, is down -2.72% since 16/07/2018. It is currently trading at $ 36.50 and has returned -3.41% over the last week.
Philip Morris International Inc. (NYSE: PM) and Newmont Mining Corporation (NYSE: NEM) are the two most active shares of the Cigarettes industry. the trading volumes of today. We will compare the two companies based on the strength of various metrics, including growth, profitability, risk, return and valuation to determine if one is a better investment than the other.
Growth
at a high compound rate generally have the greatest potential for value creation for long-term shareholders. Analysts expect PM to increase profits at an annual rate of 7.81% over the next 5 years. Comparatively, NEM is expected to grow at an annual rate of 5.92%. All things being equal, the higher growth rate of PM would imply a greater potential for capital appreciation.
Profitability and Returns
A high growth rate is not necessarily valuable to investors. In fact, companies that over-invest in low-yield projects simply to achieve a high growth rate may actually destroy shareholder value. Profitability and returns are a measure of the quality of the company and its growth opportunities. We will use the EBITDA margin and return on invested capital (ROIC) to measure it, compared to an EBITDA margin of 29.47% for the Newmont Mining Corporation (NEM). PM's return on investment is 39.50% while NEM has an ROI of 5.90%. The interpretation is that the activity of PM generates a higher return on investment than that of NEM.
Cash Flow
Profits do not always accurately reflect the amount of money that a company brings. Free cash flow ("FCF") per unit for the last twelve months was -0.41. Comparatively, NEM's free cash flow per share was -0.08. In terms of percentage of revenue, PM's free cash flow was -0.82% while NEM converted -0.58% of its revenue into cash flow. This means that for a given level of sales, NEM is able to generate more free cash flow for investors.
Liquidity and Financial Risk
Liquidity and leverage ratios are important as they reveal the financial health of a business. The PM has a current ratio of 1.20 compared to 4.20 for NEM. This means that NEM can more easily cover its most immediate liabilities over the next twelve months.
Assessment
The PM traded at a P / E before 14.48, and a P / S of 4.31, compared to a forward P / P. E of 22.67, a P / B of 1.84, and a P / S of 2.61 for NEM. Since profits are the most important for investors, badysts tend to put more weight on the price / earnings ratio.
Targets and opinions of badysts
. As Warren Buffet has said, "the price is what you pay, the value is what you get". The price of the PM is currently set at -18.13% to reach its goal of 100.06 over one year. Comparatively, NEM is -17.9% compared to its price target of 44.46. This suggests that PM is the best investment over the next year
Risk and Volatility
Analysts use beta to measure the volatility of a stock relative to the stock market. 39, whole market. Stocks with a beta above 1 tend to have larger price movements than the market as a whole, the opposite being the case for stocks with a beta below 1. PM has a beta of 0.91 and the NEM beta is 0.23. NEM shares are therefore the least volatile of the two shares
Insider activity and investor sentiment
Comparing the number of shares sold short to float is a method that badysts often use to get an idea of investor sentiment PM has a short ratio of 1.30 against a short interest of 1.58 for NEM. This implies that the market is currently less bearish on the outlook for MPs.
Abstract
Philip Morris International Inc. (NYSE: PM) defeats Newmont Mining Corporation (NYSE: NEM) on a total of 8 of the 14 factors compared between the two stocks. PM is growing rapidly, generating a higher return on investment and a lower financial risk. In terms of valuation, the PM is the cheapest of the two shares on a profit and book value, the PM is more undervalued compared to its price target. Finally, PM has better sentiment signals based on short-term interest.
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