Character vs Alphabet Which Is a Smarter Choice?

Character stocks and Alphabet stocks represent two distinct categories of stocks based on their characteristics. Character stocks are typically associated with companies known for their strong brand image, customer loyalty, and unique company culture. On the other hand, Alphabet stocks refer to companies whose names start with the letters of the alphabet, such as Apple or Amazon. While character stocks focus on qualitative factors, Alphabet stocks are based on a more arbitrary classification. Understanding the differences between these two types of stocks can help investors make informed decisions when building their investment portfolios.

Character or Alphabet?

When comparing Character and Alphabet, 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 Character and Alphabet.

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. Character has a dividend yield of 6.99%, while Alphabet has a dividend yield of 0.33%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Character reports a 5-year dividend growth of -3.04% year and a payout ratio of 67.32%. On the other hand, Alphabet reports a 5-year dividend growth of 0.00% year and a payout ratio of 5.22%.

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 Character P/E ratio at 9.64 and Alphabet's P/E ratio at 23.68. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Character P/B ratio is 1.36 while Alphabet's P/B ratio is 7.11.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Character has seen a 5-year revenue growth of 0.26%, while Alphabet's is 1.47%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Character's ROE at 14.00% and Alphabet's ROE at 31.66%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are £270.00 for Character and $180.99 for Alphabet. Over the past year, Character's prices ranged from £234.00 to £340.00, with a yearly change of 45.30%. Alphabet's prices fluctuated between $129.40 and $193.31, with a yearly change of 49.39%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.