LVMH vs Hermes International Which Is More Attractive?

LVMH (Louis Vuitton Moet Hennessy) and Hermes International are two of the most prominent luxury goods companies in the world, known for their high-end fashion and accessories. Both companies have a strong global presence and a loyal customer base. Investors often compare the performance of LVMH and Hermes stocks, analyzing factors such as revenue growth, profit margins, and market trends. Understanding the differences and similarities between these two companies can help investors make informed decisions when trading or investing in luxury goods stocks.

LVMH or Hermes International?

When comparing LVMH and Hermes International, 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 Hermes International.

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 2.15%, while Hermes International has a dividend yield of 0.66%. 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, Hermes International reports a 5-year dividend growth of 7.39% year and a payout ratio of 59.69%.

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 22.89 and Hermes International's P/E ratio at 53.49. 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 4.93 while Hermes International's P/B ratio is 15.83.

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 Hermes International's is 1.24%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with LVMH's ROE at 22.19% and Hermes International's ROE at 29.44%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $668.40 for LVMH and €2264.00 for Hermes International. Over the past year, LVMH's prices ranged from $598.42 to $958.69, with a yearly change of 60.20%. Hermes International's prices fluctuated between €1792.80 and €2430.00, with a yearly change of 35.54%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.