The shares of OGE Energy Corp. have decreased by more than -1.85% this year alone. The shares recently went up by 2.18% or $0.69 and now trades at $32.30. The shares of New Senior Investment Group Inc. (NYSE:SNR), has jumped by 16.01% year to date as of 04/16/2018. The shares currently trade at $8.77 and have been able to report a change of 6.56% over the past one week.
The stock of OGE Energy Corp. and New Senior Investment Group Inc. were two of the most active stocks on Monday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.Profitability and Returns
Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. OGE has an EBITDA margin of 38.33%, this implies that the underlying business of SNR is more profitable. The ROI of OGE is 4.50% while that of SNR is -2.30%. These figures suggest that OGE ventures generate a higher ROI than that of SNR.Cash Flow
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, OGE’s free cash flow per share is a positive 4.15, while that of SNR is negative -0.01.Liquidity and Financial Risk
The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for OGE is 0.50 and that of SNR is 3.00. This implies that it is easier for OGE to cover its immediate obligations over the next 12 months than SNR. The debt ratio of OGE is 0.82 compared to 3.77 for SNR. SNR can be able to settle its long-term debts and thus is a lower financial risk than OGE.Valuation
OGE currently trades at a forward P/E of 15.31, a P/B of 1.68, and a P/S of 2.85 while SNR trades at a P/B of 1.42, and a P/S of 1.60. This means that looking at the earnings, book values and sales basis, OGE is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.Analyst Price Targets and Opinions
The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of OGE is currently at a -6.38% to its one-year price target of 34.50. Looking at its rival pricing, SNR is at a -2.56% relative to its price target of 9.00.
When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), OGE is given a 2.10 while 3.30 placed for SNR. This means that analysts are more bullish on the outlook for SNR stocks.Insider Activity and Investor Sentiment
Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for OGE is 2.33 while that of SNR is just 2.53. This means that analysts are more bullish on the forecast for OGE stock.
The stock of New Senior Investment Group Inc. defeats that of OGE Energy Corp. when the two are compared, with SNR taking 6 out of the total factors that were been considered. SNR happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, SNR is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for SNR is better on when it is viewed on short interest.