IG vs Step Which Is More Promising?

Investment grade versus speculative grade (IG vs Step) stocks are two distinct categories within the stock market. IG stocks are considered to be safer investments, typically issued by well-established companies with solid financials. Conversely, Step stocks are considered to be riskier investments, often issued by newer or smaller companies with less predictable earnings. The key difference is the level of risk associated with each type of stock, with IG stocks offering more stability and Step stocks offering potentially higher returns. Investors must carefully consider their risk tolerance and investment goals when choosing between these two categories of stocks.

IG or Step?

When comparing IG and Step, 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 Step.

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 Step has a dividend yield of 3.63%. 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, Step reports a 5-year dividend growth of 16.19% 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 6.43 and Step's P/E ratio at 12.66. 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 Step's P/B ratio is 1.21.

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 Step's is 0.31%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with IG's ROE at 30.53% and Step's ROE at 9.59%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are £960.00 for IG and ¥2104.00 for Step. Over the past year, IG's prices ranged from £671.00 to £995.25, with a yearly change of 48.32%. Step's prices fluctuated between ¥1815.00 and ¥2137.00, with a yearly change of 17.74%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.