The shares of Nucor Corporation have increased by more than 3.19% this year alone. The shares recently went up by 1.53% or $0.99 and now trades at $65.61. The shares of VICI Properties Inc. (NYSE:VICI), has jumped by 1.17% year to date as of 07/18/2018. The shares currently trade at $20.74 and have been able to report a change of -1.05% over the past one week.
The stock of Nucor Corporation and VICI Properties Inc. were two of the most active stocks on Wednesday. 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. NUE has an EBITDA margin of 11.64%, this implies that the underlying business of VICI is more profitable. The ROI of NUE is 10.80% while that of VICI is 1.10%. These figures suggest that NUE ventures generate a higher ROI than that of VICI.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, NUE’s free cash flow per share is a negative -0.82, while that of VICI is positive 0.07.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 NUE is 2.50 and that of VICI is 21.80. This implies that it is easier for NUE to cover its immediate obligations over the next 12 months than VICI. The debt ratio of NUE is 0.43 compared to 0.68 for VICI. VICI can be able to settle its long-term debts and thus is a lower financial risk than NUE.Valuation
NUE currently trades at a forward P/E of 10.44, a P/B of 2.33, and a P/S of 0.99 while VICI trades at a forward P/E of 12.37, a P/B of 1.18, and a P/S of 18.31. This means that looking at the earnings, book values and sales basis, NUE 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 NUE is currently at a -15.64% to its one-year price target of 77.77. Looking at its rival pricing, VICI is at a -7.82% relative to its price target of 22.50.
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), NUE is given a 2.00 while 2.50 placed for VICI. This means that analysts are more bullish on the outlook for VICI 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 NUE is 2.23 while that of VICI is just 3.05. This means that analysts are more bullish on the forecast for NUE stock.
The stock of VICI Properties Inc. defeats that of Nucor Corporation when the two are compared, with VICI taking 6 out of the total factors that were been considered. VICI 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, VICI is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for VICI is better on when it is viewed on short interest.