Hermes International vs LVMH Which Is More Favorable?

Hermes International and LVMH are two of the biggest names in the luxury goods industry, known for their high-end fashion and accessories. While both companies have seen success in recent years, their stocks have performed differently. Hermes has a reputation for exclusivity and craftsmanship, leading to steady growth in their stock price. On the other hand, LVMH has a more diversified portfolio, with fluctuations in their stock price due to changes in consumer demand and economic conditions. Investors looking to add luxury stocks to their portfolio should carefully consider the strengths and weaknesses of both Hermes International and LVMH.

Hermes International or LVMH?

When comparing Hermes International and LVMH, 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 Hermes International and LVMH.

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. Hermes International has a dividend yield of 0.66%, while LVMH has a dividend yield of 2.15%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Hermes International reports a 5-year dividend growth of 7.39% year and a payout ratio of 59.69%. On the other hand, LVMH reports a 5-year dividend growth of 16.19% year and a payout ratio of 48.75%.

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 Hermes International P/E ratio at 53.49 and LVMH's P/E ratio at 22.89. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Hermes International P/B ratio is 15.83 while LVMH's P/B ratio is 4.93.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Hermes International has seen a 5-year revenue growth of 1.24%, while LVMH's is 0.85%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Hermes International's ROE at 29.44% and LVMH's ROE at 22.19%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are €2264.00 for Hermes International and $668.40 for LVMH. Over the past year, Hermes International's prices ranged from €1792.80 to €2430.00, with a yearly change of 35.54%. LVMH's prices fluctuated between $598.42 and $958.69, with a yearly change of 60.20%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.