PCI vs PCA Which Offers More Value?

PCI (Preferred Capital Index) and PCA (Preferred Capital Accumulation) stocks are two common types of preferred stock investments available to investors. While both types offer fixed dividend payments, they differ in terms of accumulation of dividends. PCI stocks pay out dividends regularly, while PCA stocks reinvest dividends to grow the investment over time. Investors must consider their investment goals and risk tolerance when deciding between PCI and PCA stocks. Ultimately, both offer steady income opportunities with potential for growth.

PCI or PCA?

When comparing PCI and PCA, 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 PCI and PCA.

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. PCI has a dividend yield of 3.56%, while PCA has a dividend yield of 4.05%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. PCI reports a 5-year dividend growth of -9.71% year and a payout ratio of 0.00%. On the other hand, PCA 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 PCI P/E ratio at 11.99 and PCA's P/E ratio at 21.38. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. PCI P/B ratio is 1.11 while PCA's P/B ratio is 2.15.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, PCI has seen a 5-year revenue growth of 0.61%, while PCA's is 0.34%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with PCI's ROE at 9.28% and PCA's ROE at 10.14%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥978.00 for PCI and ¥1962.00 for PCA. Over the past year, PCI's prices ranged from ¥768.00 to ¥1144.00, with a yearly change of 48.96%. PCA's prices fluctuated between ¥1038.00 and ¥2530.00, with a yearly change of 143.74%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.