FDM vs IDM Which Performs Better?

Fundamental and dividend investing (FDM) and income-focused dividend investing (IDM) are two popular strategies for investing in stocks. FDM involves analyzing a company's financial health, management team, and competitive position to determine its long-term growth potential. On the other hand, IDM focuses on identifying high-quality dividend-paying stocks that provide a steady stream of income for investors. Both strategies have their own benefits and drawbacks, and understanding the differences between the two can help investors make informed decisions when building their investment portfolios.

FDM or IDM?

When comparing FDM and IDM, 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 FDM and IDM.

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. FDM has a dividend yield of 9.13%, while IDM has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. FDM reports a 5-year dividend growth of 4.78% year and a payout ratio of 121.29%. On the other hand, IDM 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 FDM P/E ratio at 8.66 and IDM's P/E ratio at 158.03. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. FDM P/B ratio is 5.15 while IDM's P/B ratio is -135.91.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, FDM has seen a 5-year revenue growth of 0.35%, while IDM's is -1.15%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with FDM's ROE at 55.59% and IDM's ROE at -70.64%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are £313.50 for FDM and zł0.57 for IDM. Over the past year, FDM's prices ranged from £300.00 to £491.00, with a yearly change of 63.67%. IDM's prices fluctuated between zł0.55 and zł0.80, with a yearly change of 45.45%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.