Alibaba vs Walmart Which Is a Smarter Choice?

Alibaba Group Holding Limited and Walmart Inc. are two major players in the global retail market, each with their own unique strengths and opportunities. Alibaba, a Chinese e-commerce giant, has experienced rapid growth and success in the online retail sector, particularly in the Asian market. On the other hand, Walmart, an American multinational retail corporation, has established a strong presence in the physical retail space and is expanding its e-commerce capabilities. Both companies have their unique strengths and weaknesses, making them intriguing options for investors looking to capitalize on the rapidly evolving retail landscape.

Alibaba or Walmart?

When comparing Alibaba and Walmart, 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 Walmart.

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 3.01%, while Walmart has a dividend yield of 0.88%. 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, Walmart reports a 5-year dividend growth of 1.85% year and a payout ratio of 33.23%.

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 18.25 and Walmart's P/E ratio at 38.50. 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 1.65 while Walmart's P/B ratio is 8.60.

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 Walmart's is 0.34%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Alibaba's ROE at 8.88% and Walmart's ROE at 23.31%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $87.24 for Alibaba and $93.04 for Walmart. Over the past year, Alibaba's prices ranged from $66.63 to $117.82, with a yearly change of 76.83%. Walmart's prices fluctuated between $50.51 and $96.18, with a yearly change of 90.41%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.