Discovery vs Frontier Which Offers More Value?

Discovery and frontier stocks are two categories of investments that offer unique opportunities and risks for investors. Discovery stocks refer to companies with high growth potential and innovative products or services, while frontier stocks are investments in emerging markets with high growth potential but also a higher level of risk. Both types of stocks can bring significant returns for investors willing to take on the challenge of investing in new and unproven markets. Understanding the differences between discovery and frontier stocks is essential for building a well-balanced and diversified investment portfolio.

Discovery or Frontier?

When comparing Discovery and Frontier, 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 Discovery and Frontier.

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. Discovery has a dividend yield of 1.1%, while Frontier has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Discovery reports a 5-year dividend growth of 0.00% year and a payout ratio of 17.37%. On the other hand, Frontier 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 Discovery P/E ratio at 18.42 and Frontier's P/E ratio at -236.08. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Discovery P/B ratio is 2.33 while Frontier's P/B ratio is 2.58.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Discovery has seen a 5-year revenue growth of 0.35%, while Frontier's is 0.62%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Discovery's ROE at 13.34% and Frontier's ROE at -1.17%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are R19300.00 for Discovery and $6.30 for Frontier. Over the past year, Discovery's prices ranged from R10712.00 to R19934.00, with a yearly change of 86.09%. Frontier's prices fluctuated between $2.79 and $8.33, with a yearly change of 198.57%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.