GEM vs AGM Which Is More Promising?

Growth at a reasonable price (GARP) and aggressive growth at market price (AGM) are two common approaches to stock investing. GARP focuses on finding stocks that are undervalued based on their growth potential, while AGM emphasizes investing in high-growth stocks regardless of their current valuation. Both strategies have their own merits and risks, so investors need to carefully consider their investment goals and risk tolerance when deciding between GARP and AGM stocks. In this article, we will explore the key differences between these two approaches and help investors make informed decisions about their stock investments.

GEM or AGM?

When comparing GEM and AGM, 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 GEM and AGM.

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. GEM has a dividend yield of 1.17%, while AGM has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. GEM reports a 5-year dividend growth of 13.97% year and a payout ratio of 119.03%. On the other hand, AGM 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 GEM P/E ratio at 26.80 and AGM's P/E ratio at -5.44. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. GEM P/B ratio is 1.80 while AGM's P/B ratio is 2.08.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, GEM has seen a 5-year revenue growth of 0.63%, while AGM's is 14.70%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with GEM's ROE at 6.73% and AGM's ROE at -27.21%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥6.75 for GEM and $1.66 for AGM. Over the past year, GEM's prices ranged from ¥3.95 to ¥7.84, with a yearly change of 98.48%. AGM's prices fluctuated between $0.47 and $2.20, with a yearly change of 373.12%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.