Mary Sibour, Bcom a retail analyst is performing a P/E based comparison of two hypothetical jewelry stores as of early 2019. She has the following data for Tsavo Garnet Stores (TGS) and Moshi Ruby Zanite (MRZ).

TGS is priced at sh. 44, MRZ is priced at sh. 22.50

TGS has a simple capital structure earned sh. 2.oo per share ( basic and diluted) in 2018, and is expected to earn sh.2.20 ( basic and diluted) in 2019.

MRZ has a complex capital structure as a result of its outstanding stock options. Moreover, it has several unusual items that rescued its basic EPS in 2018 to sh. 0.50 ( versus the sh.0.75 that it earned in 2017)

For 2019, Sibour expects MRZ to achieve net income of sh. 30 million. MRZ has 30 million shares outstanding and options outstanding for an additional 3,333,333 shares.

Required

i) Which P/E ( triling or forward) should Sibour use to compare the two companies valuation?

ii) Which of the two stocks is more attractive when valued on the basis of P/Es ( assuming that all other factors are approximately the same for both stocks)?