Alibaba vs Amazon.com Which Should You Buy?

Alibaba and Amazon.com are two of the biggest e-commerce giants in the world, both offering a wide range of products and services to consumers globally. Despite their similarities, the stocks of these companies have seen fluctuations in recent years due to various factors such as regulatory challenges, competition, and economic conditions. Investors have closely monitored the performance of these stocks as they navigate through market uncertainties and strive to maintain their position as industry leaders.

Alibaba or Amazon.com?

When comparing Alibaba and Amazon.com, 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 Alibaba and Amazon.com.

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. Alibaba has a dividend yield of 2.94%, while Amazon.com has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Alibaba reports a 5-year dividend growth of 0.00% year and a payout ratio of 54.40%. On the other hand, Amazon.com 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 Alibaba P/E ratio at 18.60 and Amazon.com's P/E ratio at 47.39. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Alibaba P/B ratio is 1.68 while Amazon.com's P/B ratio is 9.12.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Alibaba has seen a 5-year revenue growth of 2.38%, while Amazon.com's is 1.33%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Alibaba's ROE at 8.88% and Amazon.com's ROE at 21.82%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $89.50 for Alibaba and $224.20 for Amazon.com. Over the past year, Alibaba's prices ranged from $66.63 to $117.82, with a yearly change of 76.83%. Amazon.com's prices fluctuated between $144.05 and $230.08, with a yearly change of 59.72%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.