Innolux vs AUO Which Is a Better Investment?

Innolux and AUO are two leading players in the display panel industry, both headquartered in Taiwan. Despite facing similar market challenges, the companies have distinct business strategies and technological strengths that set them apart. While Innolux focuses on producing LCD panels for a wide range of applications, AUO specializes in high-end displays for premium devices. Investors keen on the display panel sector should consider the financial performance, market positioning, and growth prospects of both Innolux and AUO stocks before making investment decisions.

Innolux or AUO?

When comparing Innolux and AUO, 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 Innolux and AUO.

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. Innolux has a dividend yield of 7.59%, while AUO has a dividend yield of 0.17%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Innolux reports a 5-year dividend growth of -9.90% year and a payout ratio of 0.00%. On the other hand, AUO reports a 5-year dividend growth of 6.71% 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 Innolux P/E ratio at -22.78 and AUO's P/E ratio at -137.47. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Innolux P/B ratio is 0.60 while AUO's P/B ratio is 5.70.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Innolux has seen a 5-year revenue growth of -0.19%, while AUO's is -0.92%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Innolux's ROE at -2.54% and AUO's ROE at -4.09%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are NT$15.65 for Innolux and $4.85 for AUO. Over the past year, Innolux's prices ranged from NT$13.60 to NT$19.55, with a yearly change of 43.72%. AUO's prices fluctuated between $4.44 and $6.25, with a yearly change of 40.77%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.