CMC vs Plus500 Which Is a Better Investment?

CMC Markets and Plus500 are two popular online trading platforms that allow individuals to speculate on the price movements of various financial instruments, including stocks. Both companies offer a range of features and tools to help traders make informed decisions, but there are some key differences between them. CMC Markets has been in the industry for over 30 years and offers a wide range of markets and instruments, while Plus500 is known for its user-friendly platform and competitive pricing. Investors should carefully consider their trading style and preferences before choosing between CMC Markets and Plus500 for their stock trading needs.

CMC or Plus500?

When comparing CMC and Plus500, 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 CMC and Plus500.

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. CMC has a dividend yield of 3.14%, while Plus500 has a dividend yield of 3.33%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. CMC reports a 5-year dividend growth of 1.09% year and a payout ratio of 0.00%. On the other hand, Plus500 reports a 5-year dividend growth of -25.76% year and a payout ratio of 32.81%.

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 CMC P/E ratio at 11.67 and Plus500's P/E ratio at 9.07. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. CMC P/B ratio is 0.94 while Plus500's P/B ratio is 3.54.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, CMC has seen a 5-year revenue growth of 0.08%, while Plus500's is 0.33%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CMC's ROE at 8.28% and Plus500's ROE at 39.06%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥1390.00 for CMC and £2334.00 for Plus500. Over the past year, CMC's prices ranged from ¥1040.00 to ¥1492.00, with a yearly change of 43.46%. Plus500's prices fluctuated between £1424.00 and £2684.00, with a yearly change of 88.48%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.