Amazon.com vs Alibaba Which Is More Promising?

Amazon.com and Alibaba are two of the biggest players in the e-commerce industry, but their stocks have some key differences. Amazon.com, with its strong presence in North America and Europe, has seen steady growth over the years. On the other hand, Alibaba dominates the Asian market and has been rapidly expanding its reach globally. Both companies have their unique strengths and weaknesses, making them attractive options for investors looking to capitalize on the booming e-commerce sector.

Amazon.com or Alibaba?

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

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. Amazon.com has a dividend yield of -%, while Alibaba has a dividend yield of 2.86%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Amazon.com reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Alibaba reports a 5-year dividend growth of 0.00% year and a payout ratio of 54.40%.

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 Amazon.com P/E ratio at 47.61 and Alibaba's P/E ratio at 19.15. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Amazon.com P/B ratio is 9.16 while Alibaba's P/B ratio is 1.73.

Growth Investors:

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

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $225.69 for Amazon.com and $91.83 for Alibaba. Over the past year, Amazon.com's prices ranged from $143.64 to $230.08, with a yearly change of 60.18%. Alibaba's prices fluctuated between $66.63 and $117.82, with a yearly change of 76.83%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.