AEM vs SolarWinds Which Is a Smarter Choice?

At first glance, AEM and SolarWinds may seem like two unrelated companies. However, both are major players in the tech industry, with AEM focusing on providing digital marketing solutions and SolarWinds specializing in network management software. As such, investors keen on the tech sector may find themselves comparing these two stocks. AEM has seen strong growth in recent years, while SolarWinds has faced challenges following a cybersecurity breach in 2020. This article will delve deeper into the financial performance and potential future outlook of these companies to help readers make informed investment decisions.

AEM or SolarWinds?

When comparing AEM and SolarWinds, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between AEM and SolarWinds.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. AEM has a dividend yield of -%, while SolarWinds has a dividend yield of 6.96%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. AEM reports a 5-year dividend growth of -33.41% year and a payout ratio of 0.00%. On the other hand, SolarWinds reports a 5-year dividend growth of 0.00% year and a payout ratio of 435.01%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with AEM P/E ratio at -21.09 and SolarWinds's P/E ratio at 63.14. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. AEM P/B ratio is 0.90 while SolarWinds's P/B ratio is 1.79.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, AEM has seen a 5-year revenue growth of 0.61%, while SolarWinds's is -0.61%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with AEM's ROE at -4.22% and SolarWinds's ROE at 2.87%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are S$1.34 for AEM and $14.28 for SolarWinds. Over the past year, AEM's prices ranged from S$1.16 to S$3.47, with a yearly change of 198.74%. SolarWinds's prices fluctuated between $10.14 and $14.71, with a yearly change of 45.07%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.