Alphabet vs WPP Which Is a Better Investment?

Alphabet and WPP are two prominent companies in the technology and advertising sectors, respectively. Alphabet, the parent company of Google, is known for its dominance in search, online advertising, and cloud computing. On the other hand, WPP is one of the largest advertising and marketing services companies in the world. Both companies have experienced growth and success in their respective industries, making them attractive investment options for prospective investors looking to capitalize on the tech and advertising sectors.

Alphabet or WPP?

When comparing Alphabet and WPP, 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 Alphabet and WPP.

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. Alphabet has a dividend yield of 0.31%, while WPP has a dividend yield of 3.47%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Alphabet reports a 5-year dividend growth of 0.00% year and a payout ratio of 5.22%. On the other hand, WPP reports a 5-year dividend growth of -9.86% year and a payout ratio of 207.87%.

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 Alphabet P/E ratio at 25.47 and WPP's P/E ratio at 233.35. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Alphabet P/B ratio is 7.65 while WPP's P/B ratio is 13.57.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Alphabet has seen a 5-year revenue growth of 1.47%, while WPP's is 0.55%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Alphabet's ROE at 31.66% and WPP's ROE at 5.92%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $186.26 for Alphabet and $55.81 for WPP. Over the past year, Alphabet's prices ranged from $131.06 to $196.89, with a yearly change of 50.23%. WPP's prices fluctuated between $43.02 and $57.37, with a yearly change of 33.36%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.