XP vs XD Which Is Stronger?

XP and XD stocks are two types of common stock issued by companies to shareholders. XP stands for Ex-par value, which means the stock is trading without the value of the next dividend payment included in the share price. XD stands for Ex-dividend, which means the stock is trading with the value of the next dividend payment included in the share price. Understanding the differences between XP and XD stocks is important for investors looking to maximize their returns and make informed decisions about buying or selling shares.

XP or XD?

When comparing XP and XD, 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 XP and XD.

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. XP has a dividend yield of 4.95%, while XD has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. XP reports a 5-year dividend growth of 0.00% year and a payout ratio of 44.90%. On the other hand, XD 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 XP P/E ratio at 9.97 and XD's P/E ratio at 334.75. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. XP P/B ratio is 2.04 while XD's P/B ratio is 6.40.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, XP has seen a 5-year revenue growth of 1.90%, while XD's is 0.58%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with XP's ROE at 21.56% and XD's ROE at 1.85%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $13.05 for XP and HK$24.20 for XD. Over the past year, XP's prices ranged from $12.51 to $27.02, with a yearly change of 116.03%. XD's prices fluctuated between HK$7.47 and HK$28.05, with a yearly change of 275.50%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.