SP vs HP Which Is More Attractive?

The choice between investing in a high-growth stock (HP) or a stable, established stock (SP) is a decision that many investors grapple with. HP stocks offer the potential for high returns, but also come with higher risk. On the other hand, SP stocks provide steady growth and stability, but may not offer the same level of excitement. Ultimately, the best approach will depend on an investor's risk tolerance, investment goals, and time horizon.

SP or HP?

When comparing SP and HP, 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 SP and HP.

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. SP has a dividend yield of 0.97%, while HP has a dividend yield of 3.66%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. SP reports a 5-year dividend growth of -12.94% year and a payout ratio of 17.16%. On the other hand, HP reports a 5-year dividend growth of 12.96% year and a payout ratio of 37.71%.

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 SP P/E ratio at 17.64 and HP's P/E ratio at 12.97. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. SP P/B ratio is 2.38 while HP's P/B ratio is -26.49.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, SP has seen a 5-year revenue growth of 0.22%, while HP's is 0.50%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SP's ROE at 14.24% and HP's ROE at -226.67%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are kr300.50 for SP and $36.80 for HP. Over the past year, SP's prices ranged from kr171.80 to kr343.00, with a yearly change of 99.65%. HP's prices fluctuated between $27.43 and $39.52, with a yearly change of 44.08%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.