AAP vs Canadian Tire Which Should You Buy?

AAP Inc. and Canadian Tire Corporation are two prominent companies in the retail industry that offer investors opportunities for growth and potential profit. AAP Inc. is a leading provider of automotive aftermarket parts, while Canadian Tire Corporation is a diversified retail company operating in various sectors. Both companies have experienced fluctuations in their stock prices, making them appealing choices for investors looking to capitalize on market trends. Understanding the factors driving the performance of AAP vs. Canadian Tire stocks is essential for making informed investment decisions.

AAP or Canadian Tire?

When comparing AAP and Canadian Tire, 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 AAP and Canadian Tire.

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. AAP has a dividend yield of -%, while Canadian Tire has a dividend yield of 4.7%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. AAP reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Canadian Tire reports a 5-year dividend growth of 11.12% year and a payout ratio of 55.13%.

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 AAP P/E ratio at -2.69 and Canadian Tire's P/E ratio at 13.28. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. AAP P/B ratio is -0.60 while Canadian Tire's P/B ratio is 1.51.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, AAP has seen a 5-year revenue growth of 0.24%, while Canadian Tire's is 0.36%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with AAP's ROE at 23.86% and Canadian Tire's ROE at 11.54%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $0.00 for AAP and $108.80 for Canadian Tire. Over the past year, AAP's prices ranged from $0.00 to $0.00, with a yearly change of 500.00%. Canadian Tire's prices fluctuated between $91.50 and $120.47, with a yearly change of 31.66%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.