SMS vs CSP Which Is More Profitable?

The telecommunications industry is a competitive market, with SMS (Short Message Service) and CSP (Communication Service Provider) stocks being two major players. While SMS stocks focus on the messaging services that have become an integral part of daily communication, CSP stocks offer a wider range of services including voice calls, internet access, and multimedia services. Investors exploring these two sectors will need to consider factors such as technological advancements, market demand, and regulatory changes when making investment decisions.

SMS or CSP?

When comparing SMS and CSP, 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 SMS and CSP.

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. SMS has a dividend yield of 1.19%, while CSP has a dividend yield of 0.97%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. SMS reports a 5-year dividend growth of 2.90% year and a payout ratio of 0.00%. On the other hand, CSP reports a 5-year dividend growth of -22.88% year and a payout ratio of 33.38%.

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 SMS P/E ratio at 20.66 and CSP's P/E ratio at 42.99. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. SMS P/B ratio is 3.04 while CSP's P/B ratio is 2.44.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, SMS has seen a 5-year revenue growth of 0.75%, while CSP's is -0.61%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SMS's ROE at 15.11% and CSP's ROE at 5.79%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥1672.00 for SMS and $12.86 for CSP. Over the past year, SMS's prices ranged from ¥1637.00 to ¥2924.00, with a yearly change of 78.62%. CSP's prices fluctuated between $8.21 and $29.93, with a yearly change of 264.27%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.