Amazon.com vs Alphabet Which Is More Profitable?

Amazon.com and Alphabet, the parent company of Google, are two of the biggest tech giants in the world. Both companies have a dominant presence in the e-commerce and search engine markets, respectively. Amazon's stock has been a favorite among investors due to its strong revenue growth and diversification into various industries. On the other hand, Alphabet's stock has also performed well, driven by its advertising business and innovative technologies. This comparison will explore the key differences and similarities between these two powerhouse companies.

Amazon.com or Alphabet?

When comparing Amazon.com and Alphabet, 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 Alphabet.

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 Alphabet has a dividend yield of 0.33%. 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, Alphabet reports a 5-year dividend growth of 0.00% year and a payout ratio of 5.22%.

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 43.56 and Alphabet's P/E ratio at 23.51. 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 8.38 while Alphabet's P/B ratio is 7.06.

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 Alphabet's is 1.47%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and Alphabet's ROE at 31.66%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $205.59 for Amazon.com and $179.99 for Alphabet. Over the past year, Amazon.com's prices ranged from $139.52 to $212.25, with a yearly change of 52.13%. Alphabet's prices fluctuated between $129.40 and $193.31, with a yearly change of 49.39%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.