In celebration of March Madness, the Motley Fool is pitting 16 editor-selected companies in a fierce Stock Madness bracket ... we’re down to 4! For each matchup, we will show you how the companies rank based on five key metrics, but your votes will determine the winner.
This semi-final matchup is Disney
|
Factor |
Disney |
Petroleo Brasileiro |
|
|---|---|---|---|
|
Cheapness |
20.0 |
10.5 |
|
|
Growth |
13.3% |
26.9% |
|
|
Operations |
9.11% |
16.88% |
|
|
Balance Sheet |
.38 |
.67 |
|
|
CAPS Rating |
|
|
Round 1: Cheapness
Advantage: Petroleo Brasileiro. Cheapness is determined by P/E ratio. The lower the better. Be careful of earnings near zero that skew the ratio, one-time gains and losses, and pasts that aren’t indicative of futures (the more dynamic the industry, the more this is true).
Round 2: Growth
Advantage: Petroleo Brasileiro. Growth here is the trailing 5-year EPS growth rate. This trailing earnings growth helps put notoriously-optimistic Wall Street projections in perspective.
Round 3: Operations
Advantage: Petroleo Brasileiro. Net margin percentage shows how efficiently a company turns revenue into profit. The more similar the business models, the more relevant the comparison.
Round 4: Balance sheet
Advantage: Disney. As with net margins, the debt to capital ratio is most relevant in comparing companies in similar industries. In this battle we give the nod to the lower-debt company, but attention should also be paid to the cost of debt, interest coverage ratios, and the stability of the business (the more stable a company’s operations, the more debt it can safely carry).
Round 5: CAPS rating
Advantage: Petroleo Brasileiro. A company’s CAPS rating is our community’s opinion of the stock. You can get more information on your stocks -- and our community’s opinions of those stocks -- by clicking over to CAPS area.
Each of these five rankings need more context -- like, how these companies stack up against their potential championship-round foes -- Apple
