IG vs HG Which Outperforms?

Investing in growth (IG) and high-growth (HG) stocks can be a lucrative way to build wealth in the stock market. IG stocks are typically established companies with consistent earnings growth and strong market positions, while HG stocks are newer companies experiencing rapid growth and expansion. Both types of stocks can offer investors the potential for high returns, but they also come with higher risk. Understanding the differences between IG and HG stocks is crucial for making informed investment decisions.

IG or HG?

When comparing IG and HG, 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 HG.

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 4.78%, while HG has a dividend yield of -%. 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, HG reports a 5-year dividend growth of 0.00% year and a payout ratio of -67.77%.

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 IG P/E ratio at 6.43 and HG's P/E ratio at -33.66. 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 1.95 while HG's P/B ratio is 0.44.

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 0.85%, while HG's is 0.00%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with IG's ROE at 30.53% and HG's ROE at -1.31%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are £960.00 for IG and $5.05 for HG. Over the past year, IG's prices ranged from £671.00 to £995.25, with a yearly change of 48.32%. HG's prices fluctuated between $4.86 and $6.51, with a yearly change of 33.95%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.