Federal vs Central Which Is a Better Investment?

Federal stocks refer to the reserves of goods or materials that are held by a country's central government for emergency situations or to regulate the economy. On the other hand, central stocks are the inventories of goods or materials that are managed by a central authority such as a central bank or a central warehouse. The main difference between federal and central stocks lies in who manages and controls these reserves. Both types of stocks play a crucial role in ensuring stability and security in a nation's economy.

Federal or Central?

When comparing Federal and Central, 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 Federal and Central.

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. Federal has a dividend yield of -%, while Central has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Federal reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Central 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 Federal P/E ratio at -9.72 and Central's P/E ratio at -295.62. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Federal P/B ratio is 1.39 while Central's P/B ratio is 47.22.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Federal has seen a 5-year revenue growth of -0.90%, while Central's is 0.00%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Federal's ROE at -14.28% and Central's ROE at -14.50%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are NT$20.55 for Federal and HK$8.36 for Central. Over the past year, Federal's prices ranged from NT$17.20 to NT$24.90, with a yearly change of 44.77%. Central's prices fluctuated between HK$4.44 and HK$9.99, with a yearly change of 125.00%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.