Challenger vs Tesla Which Is More Attractive?

Challenger and Tesla are two companies that have been dominating the stock market in recent years. While both are in the automotive industry, they have taken vastly different paths to success. Challenger is a traditional car manufacturer with a long history of producing reliable vehicles. On the other hand, Tesla is a disruptor in the industry, known for its innovative electric cars and technology. Investors are constantly comparing the two stocks, trying to determine which one offers the best potential for growth and return on investment.

Challenger or Tesla?

When comparing Challenger and Tesla, 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 Challenger and Tesla.

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. Challenger has a dividend yield of 4.38%, while Tesla has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Challenger reports a 5-year dividend growth of -7.53% year and a payout ratio of 114.83%. On the other hand, Tesla reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

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 Challenger P/E ratio at 31.78 and Tesla's P/E ratio at 109.81. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Challenger P/B ratio is 1.07 while Tesla's P/B ratio is 19.95.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Challenger has seen a 5-year revenue growth of -0.22%, while Tesla's is 2.63%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Challenger's ROE at 3.34% and Tesla's ROE at 19.29%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are A$6.00 for Challenger and $415.71 for Tesla. Over the past year, Challenger's prices ranged from A$5.85 to A$7.57, with a yearly change of 29.40%. Tesla's prices fluctuated between $138.80 and $436.30, with a yearly change of 214.34%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.