Alibaba vs Rocket Internet Which Is More Reliable?

Alibaba and Rocket Internet are two prominent players in the e-commerce industry, but they have distinct business models and market strategies. Alibaba, a Chinese multinational conglomerate, dominates the Asian market with its online marketplaces and cloud computing services. On the other hand, Rocket Internet is a German startup incubator that invests in and operates numerous e-commerce ventures worldwide. Investors often compare the two companies' stocks, analyzing their financial performance, growth potential, and competitive advantages in the global marketplace.

Alibaba or Rocket Internet?

When comparing Alibaba and Rocket Internet, 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 Rocket Internet.

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 3.07%, while Rocket Internet 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, Rocket Internet 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 17.84 and Rocket Internet's P/E ratio at 0.00. 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 1.62 while Rocket Internet's P/B ratio is 0.00.

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 Rocket Internet's is 0.00%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Alibaba's ROE at 8.88% and Rocket Internet's ROE at 0.00%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $85.90 for Alibaba and €14.50 for Rocket Internet. Over the past year, Alibaba's prices ranged from $66.63 to $117.82, with a yearly change of 76.83%. Rocket Internet's prices fluctuated between €13.70 and €17.80, with a yearly change of 29.93%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.