Alphabet vs Shopify Which Is More Attractive?

Alphabet and Shopify are two prominent companies in the technology sector with their stocks being highly sought after by investors. Alphabet, the parent company of Google, has a strong presence in the digital advertising and cloud computing markets. On the other hand, Shopify is a leading e-commerce platform that has experienced rapid growth in recent years. Both companies have shown resilience during challenging economic times, making them attractive options for investors looking for stability and potential growth in their portfolios.

Alphabet or Shopify?

When comparing Alphabet 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 Alphabet 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. Alphabet has a dividend yield of 0.32%, while Shopify has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Alphabet reports a 5-year dividend growth of 0.00% year and a payout ratio of 5.22%. 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 Alphabet P/E ratio at 24.14 and Shopify's P/E ratio at 105.87. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Alphabet P/B ratio is 7.24 while Shopify's P/B ratio is 14.47.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Alphabet has seen a 5-year revenue growth of 1.47%, while Shopify's is 4.42%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Alphabet's ROE at 31.66% and Shopify's ROE at 14.85%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $182.67 for Alphabet and $112.69 for Shopify. Over the past year, Alphabet's prices ranged from $131.06 to $193.31, with a yearly change of 47.50%. Shopify's prices fluctuated between $48.56 and $120.72, with a yearly change of 148.60%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.