LVMH vs Frontier Which Is a Better Investment?

LVMH, the French multinational luxury goods conglomerate, is often seen as a stable and reliable investment option due to its strong global presence and diversified portfolio of high-end brands. On the other hand, Frontier stocks represent investments in emerging markets with higher risk and potential for growth. Investors often find themselves weighing the stability of LVMH against the potential for high returns offered by Frontier stocks. Both options have their own merits and drawbacks, making it essential for investors to carefully consider their risk tolerance and investment goals before making a decision.

LVMH or Frontier?

When comparing LVMH and Frontier, 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 LVMH and Frontier.

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. LVMH has a dividend yield of 2.34%, while Frontier has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. LVMH reports a 5-year dividend growth of 16.19% year and a payout ratio of 48.75%. On the other hand, Frontier reports a 5-year dividend growth of 0.00% 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 LVMH P/E ratio at 21.39 and Frontier's P/E ratio at -251.12. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. LVMH P/B ratio is 4.61 while Frontier's P/B ratio is 2.74.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, LVMH has seen a 5-year revenue growth of 0.85%, while Frontier's is 0.62%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with LVMH's ROE at 22.19% and Frontier's ROE at -1.17%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $636.49 for LVMH and $6.57 for Frontier. Over the past year, LVMH's prices ranged from $600.83 to $958.69, with a yearly change of 59.56%. Frontier's prices fluctuated between $2.79 and $8.33, with a yearly change of 198.57%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.