UT vs SMU Which Is a Better Investment?

The University of Texas (UT) and Southern Methodist University (SMU) are two prominent universities in Texas with successful alumni networks and strong academic reputations. Just like their football rivalry, their stocks are also closely watched by investors. UT, being a public university, often reflects the overall trends in the market, while SMU, a private university, may not be as volatile but has shown consistent growth over the years. Both stocks offer unique opportunities for investors looking to diversify their portfolios with education-related assets.

UT or SMU?

When comparing UT and SMU, 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 UT and SMU.

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. UT has a dividend yield of 4.41%, while SMU has a dividend yield of 5.64%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. UT reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, SMU reports a 5-year dividend growth of 0.00% year and a payout ratio of 98.35%.

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 UT P/E ratio at 9.26 and SMU's P/E ratio at 13.30. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. UT P/B ratio is 2.51 while SMU's P/B ratio is 1.16.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, UT has seen a 5-year revenue growth of 0.59%, while SMU's is 0.24%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with UT's ROE at 28.80% and SMU's ROE at 8.59%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥2116.00 for UT and CLP$160.17 for SMU. Over the past year, UT's prices ranged from ¥1942.00 to ¥3770.00, with a yearly change of 94.13%. SMU's prices fluctuated between CLP$139.20 and CLP$192.00, with a yearly change of 37.93%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.