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The shares of Estee Lauder Companies Inc. (NYSE: EL) have grown more than 9.81% this year and have recently decreased by -1.26% or – $ 1.79 for s & # Set to $ 139.72. In contrast, Owens-Illinois, Inc. (NYSE: OI) is down -16.73% since 26/07/2018. It is currently trading at $ 18.46 and has returned 9.69% over the last week.
Estee Lauder Inc. (NYSE: EL) and Owens-Illinois, Inc. (NYSE: OI) are the two most active employees. The product industry based on trading volumes of today. The market is clearly enthusiastic about these two actions, but what is the best investment? To answer this question, we will compare the two companies based on the strength of their growth, profitability, risk, returns, valuation, analyst recommendations and internal trends.
Growth
rate is a defining characteristic of the best companies for long-term investment. Analysts predict that EL will increase its profits at an annual rate of 15.48% over the next five years. Comparatively, OI is expected to grow at an annual rate of 7.13%. All things being equal, the higher growth rate of EL 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 an EBITDA margin of 11.2% for Owens-Illinois, Inc. (OI). The ROI of EL is 16.70% while OI has a ROI of 3.20%. The interpretation is that EL activity generates a higher return on investment than OI.
Cash Flow
Money is king when it comes to investing. Free cash flow ("FCF") per EL share for the last twelve months was +0.63. Comparatively, free cash flow per RO share was -3.10. In terms of percentage of revenue, EL's free cash flow was 1.96% while OI converted 7.3% of its revenue into cash flow. This means that for a given level of sales, EL can generate more free cash flow for investors.
Liquidity and Financial Risk
The liquidity and leverage ratios provide insight into the financial health of a business. determine the likelihood that the business can continue to operate as an operating business. EL has a current ratio of 1.80 against 1.30 for OI. This means that EL can more easily cover its most immediate liabilities over the next twelve months. The debt ratio of EL is 0.78 against a D / E of 5.90 for OI. OI is therefore the most solvent of the two companies and presents a lower financial risk.
Valuation
EL exchange at a forward P / E of 27.89, a P / B of 10.91, and a P / S of 3.86, compared to a P / E before of 6.21, a P / B of 3.04, and a P / S of 0.43 for OI. EL is the most expensive of the two stocks in terms of profits, book value and sales. Since profits are the most important for investors, analysts tend to put more weight on the price / earnings ratio.
Targets and opinions on analyst prices
the stock is accurately valued. To get an idea of "value", we have to compare the current price to a measure of intrinsic value as a price target. EL is currently priced at -10.77% at its one-year price target of 156.58. Comparatively, OI is -21.18% compared to its target price of 23.42. This suggests that OI is the best investment in the next year.
Risk and Volatility
Beta is a metric that investors frequently use to analyze systematic risk of an action. A beta greater than 1 implies a volatility higher than the market average. Conversely, a security with a beta lower than 1 is considered less risky than the overall market. EL has a beta of 0.64 and the beta version of OI is 1.39. EL shares are therefore the least volatile of the two shares
Insider activity and investor sentiment
Compare the number of shares sold short to float is a method that analysts often use to get an idea of investor sentiment. EL has a short ratio of 4.59 compared to a short interest of 3.17 for OI. This implies that the market is currently less bearish on the outlook for OI.
Abstract
Estee Lauder Inc. (NYSE: EL) defeats Owens-Illinois, Inc. (NYSE: OI) out of a total of 9 out of 14 factors compared between the two stocks. EL is growing rapidly, is more profitable, generates a higher return on investment, has higher cash flow per share, has a higher currency conversion rate, higher liquidity and lower financial risk.
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