The shares of Keurig Dr Pepper Inc. have increased by more than 52.75% this year alone. The shares recently went up by 0.84% or $0.2 and now trades at $23.87. The shares of Keryx Biopharmaceuticals, Inc. (NASDAQ:KERX), has slumped by -23.87% year to date as of 08/09/2018. The shares currently trade at $3.54 and have been able to report a change of -14.90% over the past one week.
The stock of Keurig Dr Pepper Inc. and Keryx Biopharmaceuticals, Inc. were two of the most active stocks on Thursday. 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. The ROI of KDP is 13.50% while that of KERX is -190.10%. These figures suggest that KDP ventures generate a higher ROI than that of KERX.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, KDP’s free cash flow per share is a negative -0.62, while that of KERX is also a negative -0.06.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 KDP is 0.80 and that of KERX is 2.70. This implies that it is easier for KDP to cover its immediate obligations over the next 12 months than KERX.Valuation
KDP currently trades at a forward P/E of 15.36, a P/B of 1.73, and a P/S of 0.64 while KERX trades at a P/S of 6.36. This means that looking at the earnings, book values and sales basis, KDP 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 KDP is currently at a -1.36% to its one-year price target of 24.20. Looking at its rival pricing, KERX is at a -46.69% relative to its price target of 6.64.
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), KDP is given a 2.60 while 2.40 placed for KERX. This means that analysts are more bullish on the outlook for KDP stocks.
The stock of Keurig Dr Pepper Inc. defeats that of Keryx Biopharmaceuticals, Inc. when the two are compared, with KDP taking 6 out of the total factors that were been considered. KDP 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, KDP is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for KDP is better on when it is viewed on short interest.