Amazon.com vs Apple Which Should You Buy?

Amazon.com and Apple are two tech giants that have been dominating the stock market for years. Both companies have a strong presence in the retail and technology sectors, with Amazon known for its e-commerce platform and Apple for its innovative products like the iPhone and Macbook. Investors constantly compare the two stocks to determine which one offers better long-term growth potential. This analysis will delve into the financial performance and market trends of Amazon.com and Apple to help investors make informed decisions.

Amazon.com or Apple?

When comparing Amazon.com and Apple, 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 Apple.

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 Apple has a dividend yield of 0.55%. 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, Apple reports a 5-year dividend growth of -19.56% year and a payout ratio of 16.25%.

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 Apple's P/E ratio at 36.29. 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 Apple's P/B ratio is 59.74.

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 Apple's is 0.82%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and Apple's ROE at 137.87%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $205.59 for Amazon.com and $221.50 for Apple. Over the past year, Amazon.com's prices ranged from $139.52 to $212.25, with a yearly change of 52.13%. Apple's prices fluctuated between $164.08 and $237.49, with a yearly change of 44.74%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.