ASX vs NZX Which Is a Better Investment?

The ASX (Australian Securities Exchange) and NZX (New Zealand Stock Exchange) are two leading stock exchanges in the Asia-Pacific region, providing investors with opportunities to participate in the dynamic economies of Australia and New Zealand. Both exchanges offer a diverse range of listed companies across various sectors, allowing investors to access different investment opportunities. While the ASX is larger and more established, the NZX has its own unique advantages, including a focus on the primary industries that drive New Zealand's economy. Understanding the differences between ASX and NZX stocks can help investors make informed decisions when building their investment portfolios.

ASX or NZX?

When comparing ASX and NZX, 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 ASX and NZX.

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. ASX has a dividend yield of 3.18%, while NZX has a dividend yield of 4.21%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. ASX reports a 5-year dividend growth of -1.52% year and a payout ratio of 89.32%. On the other hand, NZX reports a 5-year dividend growth of 5.81% year and a payout ratio of 83.61%.

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 ASX P/E ratio at 29.93 and NZX's P/E ratio at 19.28. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. ASX P/B ratio is 3.51 while NZX's P/B ratio is 3.86.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, ASX has seen a 5-year revenue growth of 0.40%, while NZX's is 0.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with ASX's ROE at 11.85% and NZX's ROE at 20.76%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $43.03 for ASX and NZ$1.45 for NZX. Over the past year, ASX's prices ranged from $37.08 to $46.27, with a yearly change of 24.78%. NZX's prices fluctuated between NZ$0.97 and NZ$1.53, with a yearly change of 57.73%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.