GEM vs Scroll Which Outperforms?

Investors often debate whether they should invest in growth or value stocks. Growth stocks, often referred to as GEM (growth at a reasonable price) stocks, are companies that are expected to grow at an above-average rate compared to the market. On the other hand, value stocks, also known as Scroll (sustainable company, reasonable price, overlooked and undervalued stock) stocks, are typically undervalued compared to their intrinsic value. Both strategies have their own pros and cons, making it crucial for investors to carefully consider their investment goals and risk tolerance before making a decision.

GEM or Scroll?

When comparing GEM and Scroll, 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 Scroll.

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 Scroll has a dividend yield of 3.85%. 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, Scroll reports a 5-year dividend growth of 44.04% 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 Scroll's P/E ratio at 9.23. 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 Scroll's P/B ratio is 1.06.

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 Scroll's is 0.10%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with GEM's ROE at 6.73% and Scroll's ROE at 11.90%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥6.75 for GEM and ¥1082.00 for Scroll. Over the past year, GEM's prices ranged from ¥3.95 to ¥7.84, with a yearly change of 98.48%. Scroll's prices fluctuated between ¥860.00 and ¥1107.00, with a yearly change of 28.72%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.