Digital vs Retail Which Offers More Value?

The debate between investing in digital versus retail stocks continues to be a hot topic in the financial world. With the rise of e-commerce and online shopping, digital stocks have seen significant growth in recent years. On the other hand, traditional retail stocks have faced challenges as brick-and-mortar stores struggle to compete with online competitors. Investors must weigh the potential for innovation and growth in the digital sector against the stability and potential value of retail stocks in their investment portfolios.

Digital or Retail?

When comparing Digital and Retail, 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 Retail.

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 2.36%, while Retail 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, Retail reports a 5-year dividend growth of 0.00% year and a payout ratio of 3.95%.

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 13.44 and Retail's P/E ratio at 8.84. 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 0.73 while Retail's P/B ratio is 0.47.

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 Retail's is 0.00%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Digital's ROE at 5.45% and Retail's ROE at 2.42%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥1252.00 for Digital and $0.07 for Retail. Over the past year, Digital's prices ranged from ¥870.00 to ¥1304.00, with a yearly change of 49.89%. Retail's prices fluctuated between $0.02 and $0.13, with a yearly change of 527.00%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.