SM Entertainment vs YG Entertainment

SM Entertainment and YG Entertainment are two of the biggest entertainment companies in South Korea, known for managing some of the most popular K-pop idols. Their stocks have been closely watched by investors and fans alike, as both companies have experienced fluctuations in their value over the years. While SM Entertainment has a longer history and more diversified business portfolio, YG Entertainment has faced controversies that have affected its stock performance. Both companies continue to compete for dominance in the highly competitive K-pop industry.

SM Entertainment or YG Entertainment?

When comparing SM Entertainment and YG Entertainment, 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 SM Entertainment and YG Entertainment.

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. SM Entertainment has a dividend yield of 1.82%, while YG Entertainment has a dividend yield of 0.66%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. SM Entertainment reports a 5-year dividend growth of 0.00% year and a payout ratio of 46.99%. On the other hand, YG Entertainment reports a 5-year dividend growth of 0.00% year and a payout ratio of 41.92%.

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 SM Entertainment P/E ratio at 25.81 and YG Entertainment's P/E ratio at 53.67. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. SM Entertainment P/B ratio is 2.26 while YG Entertainment's P/B ratio is 1.54.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, SM Entertainment has seen a 5-year revenue growth of 0.50%, while YG Entertainment's is 1.06%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SM Entertainment's ROE at 8.40% and YG Entertainment's ROE at 2.87%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₩65800.00 for SM Entertainment and ₩37650.00 for YG Entertainment. Over the past year, SM Entertainment's prices ranged from ₩55100.00 to ₩122200.00, with a yearly change of 121.78%. YG Entertainment's prices fluctuated between ₩29950.00 and ₩66200.00, with a yearly change of 121.04%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.