Digital vs GameStop Which Outperforms?

Digital stocks, such as those of technology companies like Apple, Amazon, and Google, have been soaring in recent years as more people turn to online platforms for shopping, entertainment, and communication. On the other hand, GameStop stocks, which are tied to the brick-and-mortar video game retailer, have been struggling as digital downloads and online gaming continue to dominate the industry. This stark contrast between the two types of stocks highlights the shifting landscape of modern commerce and the importance of adapting to changing consumer trends.

Digital or GameStop?

When comparing Digital and GameStop, 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 Digital and GameStop.

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. Digital has a dividend yield of 2.38%, while GameStop has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Digital reports a 5-year dividend growth of 9.57% year and a payout ratio of 79.08%. On the other hand, GameStop 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 Digital P/E ratio at 13.31 and GameStop's P/E ratio at 186.97. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Digital P/B ratio is 0.72 while GameStop's P/B ratio is 2.45.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Digital has seen a 5-year revenue growth of -0.76%, while GameStop's is -0.15%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Digital's ROE at 5.45% and GameStop's ROE at 2.13%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥1242.00 for Digital and $26.85 for GameStop. Over the past year, Digital's prices ranged from ¥870.00 to ¥1304.00, with a yearly change of 49.89%. GameStop's prices fluctuated between $9.95 and $64.83, with a yearly change of 551.56%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.