Amazon.com vs Best Buy Which Is More Promising?

Amazon.com and Best Buy are two retail giants that have long been competing for consumer dollars in the e-commerce space. Both companies have seen impressive growth in recent years, with Amazon dominating the online retail market and Best Buy carving out a niche in the electronics and appliances sector. Investors have taken notice of these two behemoths, with Amazon's stock price skyrocketing and Best Buy holding its own despite increased competition. In this comparison, we will analyze the performance, growth potential, and future outlook of Amazon.com and Best Buy stocks to determine which may be the better investment option.

Amazon.com or Best Buy?

When comparing Amazon.com and Best Buy, 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 Best Buy.

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 Best Buy has a dividend yield of 5.24%. 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, Best Buy reports a 5-year dividend growth of 15.38% year and a payout ratio of 63.81%.

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 Best Buy's P/E ratio at 15.31. 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 Best Buy's P/B ratio is 6.21.

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 Best Buy's is 0.47%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and Best Buy's ROE at 41.81%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $205.59 for Amazon.com and $88.19 for Best Buy. Over the past year, Amazon.com's prices ranged from $139.52 to $212.25, with a yearly change of 52.13%. Best Buy's prices fluctuated between $62.92 and $103.71, with a yearly change of 64.83%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.