Alibaba vs Shopify

Alibaba Group Holding Limited and Shopify Inc. are two e-commerce giants that have captured the attention of investors worldwide. Alibaba, a Chinese multinational conglomerate, dominates the e-commerce market in Asia, while Shopify, a Canadian e-commerce company, is a leading player in North America. Both companies have experienced impressive growth in recent years, but their stocks have performed differently. Investors are closely watching to see which company will continue to outperform in the competitive e-commerce landscape.

Alibaba or Shopify?

When comparing Alibaba and Shopify, 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 Shopify.

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 0.36%, while Shopify 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 25.58%. On the other hand, Shopify 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 24.97 and Shopify's P/E ratio at 82.95. 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 1.87 while Shopify's P/B ratio is 11.51.

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 Shopify's is 4.42%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Alibaba's ROE at 7.07% and Shopify's ROE at 14.38%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $101.64 for Alibaba and $80.46 for Shopify. Over the past year, Alibaba's prices ranged from $66.63 to $117.82, with a yearly change of 76.83%. Shopify's prices fluctuated between $45.50 and $91.57, with a yearly change of 101.25%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.