IG vs ACC

Investors often find themselves debating between investing in growth stocks, like those found on Instagram (IG), or dividend-paying stocks, like those listed on the Australian Stock Exchange (ACC). While growth stocks have the potential for high returns, they also come with higher risk. On the other hand, dividend-paying stocks offer a steady stream of income but may not see as much price appreciation. Ultimately, the decision between IG and ACC stocks depends on individual investment goals and risk tolerance.

IG or ACC?

When comparing IG and ACC, 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 IG and ACC.

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. IG has a dividend yield of 4.93%, while ACC has a dividend yield of 0.33%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. IG reports a 5-year dividend growth of 0.91% year and a payout ratio of 31.14%. On the other hand, ACC reports a 5-year dividend growth of -9.22% 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 IG P/E ratio at 6.28 and ACC's P/E ratio at 19.31. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. IG P/B ratio is 1.90 while ACC's P/B ratio is 2.64.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, IG has seen a 5-year revenue growth of 0.97%, while ACC's is 0.27%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with IG's ROE at 30.53% and ACC's ROE at 14.33%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are £922.00 for IG and ₹2290.55 for ACC. Over the past year, IG's prices ranged from £600.50 to £995.25, with a yearly change of 65.74%. ACC's prices fluctuated between ₹1803.00 and ₹2844.00, with a yearly change of 57.74%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.