[ad_1]
The shares of Kosmos Energy Ltd. (NYSE: KOS) have increased more than 29.93% this year and have recently increased by 2.65% or $ 0.23 to settle at $ 8.90. The Interpublic Group of Companies, Inc. (NYSE: IPG), by contrast, is up 14.53% since the beginning of the year to 07/09/2018. It is currently trading at $ 23.09 and has returned -1.49% over the past week.
Kosmos Energy Ltd. (NYSE: KOS) and Interpublic Group of Companies (NYSE: IPG) are the two most active names in the market. Independent oil and gas industry based on trading volumes of today. Investors are clearly interested in both names, but is one a better choice than the other? We will compare the two companies through growth, profitability, risk, valuation and internal trends to answer this question.
Growth
The ability to consistently increase profits at a high compound rate is a feature of the best companies. long-term investment. Analysts expect KOS to increase profits at an annual rate of 23.80% over the next 5 years. Comparatively, IPG is expected to grow at an annual rate of 6.97%. All things being equal, the higher growth rate of KOS would imply a greater potential for capital appreciation.
Profitability and Returns
Growth does not mean much if it is done at the cost of low profitability. To account for differences in capital structure, we will use EBITDA margin and return on invested capital (ROCE) as measures of profitability and return. , compared to a 13.47% EBITDA margin for The Interpublic Group of Companies, Inc. (IPG). The ROI of KOS is -5.70% while IPG has a ROI of 17.60%. The interpretation is that the IPG activity generates a higher return on investment than KOS.
Cash Flow
The results do not always accurately reflect the amount of money that a company brings. Free Cash Flow ("FCF") of KOS shares for the last twelve months was -0.14. Comparatively, IPG's free cash flow per share was -2.17. In terms of percentage of revenue, KOS free cash flow was -0.01% while IPG converted -10.61% of its revenue into cash flow. This means that for a given level of sales, KOS is able to generate more free cash flow for investors.
Liquidity and Financial Risk
Liquidity and leverage ratios are important because they reveal the financial health of a business. KOS has a current ratio of 1.30 compared to 1.00 for IPG. This means that KOS can more easily cover its most immediate liabilities over the next twelve months. The debt-to-GDP ratio of KOS is 1.50 against a D / E of 0.99 for IPG. KOS is therefore the most solvent of the two companies and presents a lower financial risk.
Assessment
KOS trades at a P / E before 29.28, a P / B of 4.18, and a P / S of 5.85, compared to a P / E before 12, 41, a P / B of 4.20, and a P / S of 1.07 for IPG. KOS is the cheapest of the two values on the basis of the book value, but it is expensive in terms of P / E ratio and P / S ratio. Since profits are the most important for investors, badysts have tendency to give more weight to 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". KOS is currently priced at -2.94% to its goal of 9.17. Comparatively, IPG is -3.06% against its price target of 23.82. This suggests that IPG is the best investment over the next year.
Risk and Volatility
To badess the market risk of a given security, investors use beta. Stocks with beta greater than 1 are more volatile than the market as a whole. Conversely, a beta below 1 implies a lower than average systematic risk. KOS has a beta of 1.59 and the beta version of IPG is 1.24. IPG shares are therefore the least volatile of the two shares
Insider trading and investor sentiment
The badysis of trends in buying and selling of insiders can be extended to the aggregated level. Short-term interest, which represents the percentage of marketable shares of an action being shorted, reflects what the market as a whole feels about an action. KOS has a short ratio of 6.68 compared to a short interest of 6.36 for IPG. This implies that the market is currently less bearish on the outlook for IPG.
Abstract
The Interpublic Group of Companies, Inc. (NYSE: IPG) defeats Kosmos Energy Ltd. (NYSE: KOS) out of a total of 8 of 14 factors compared between the two stocks. IPG is growing rapidly, generating a higher return on investment and a lower financial risk. In terms of valuation, IPG is the cheapest of the two actions on a revenue and sales basis, IPG is more undervalued compared to its price target. Finally, IPG has better sentiment signals based on a short interest.
Source link
