Goodyear vs Premium Brands Which Is a Better Investment?

Investors looking to add stocks to their portfolio often face the dilemma of choosing between well-known brands like Goodyear and premium brands. Goodyear, a reliable player in the tire industry, offers stability and consistent performance. On the other hand, premium brands may offer higher growth potential but also come with increased volatility. Understanding the market dynamics and the investment goals are crucial to making an informed decision when comparing Goodyear with premium brands.

Goodyear or Premium Brands?

When comparing Goodyear and Premium Brands, 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 Goodyear and Premium Brands.

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. Goodyear has a dividend yield of 4.02%, while Premium Brands has a dividend yield of 4.17%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Goodyear reports a 5-year dividend growth of 0.00% year and a payout ratio of 45.13%. On the other hand, Premium Brands reports a 5-year dividend growth of 10.14% year and a payout ratio of 145.77%.

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 Goodyear P/E ratio at 11.22 and Premium Brands's P/E ratio at 35.67. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Goodyear P/B ratio is 0.34 while Premium Brands's P/B ratio is 2.03.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Goodyear has seen a 5-year revenue growth of 0.62%, while Premium Brands's is 0.51%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Goodyear's ROE at 3.14% and Premium Brands's ROE at 5.66%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ฿174.00 for Goodyear and C$79.38 for Premium Brands. Over the past year, Goodyear's prices ranged from ฿135.00 to ฿197.50, with a yearly change of 46.30%. Premium Brands's prices fluctuated between C$75.67 and C$97.28, with a yearly change of 28.56%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.