Amazon.com vs Canadian Tire Which Is a Better Investment?

Amazon.com and Canadian Tire are two major retail giants with widespread influence in the global market. Amazon.com, a technology powerhouse, has revolutionized the way people shop with its e-commerce platform and subscription services. Canadian Tire, a renowned Canadian retailer, has a strong presence in the automotive, hardware, and home goods sectors. Both companies have had varying levels of success in recent years, prompting investors to weigh the pros and cons of each stock.

Amazon.com or Canadian Tire?

When comparing Amazon.com and Canadian Tire, 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 Canadian Tire.

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 Canadian Tire has a dividend yield of 4.19%. 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, Canadian Tire reports a 5-year dividend growth of 11.12% year and a payout ratio of 55.13%.

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 42.66 and Canadian Tire's P/E ratio at 13.04. 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 8.21 while Canadian Tire's P/B ratio is 1.48.

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 Canadian Tire's is 0.36%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and Canadian Tire's ROE at 11.54%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $199.62 for Amazon.com and $107.78 for Canadian Tire. Over the past year, Amazon.com's prices ranged from $141.50 to $215.90, with a yearly change of 52.58%. Canadian Tire's prices fluctuated between $91.50 and $120.47, with a yearly change of 31.66%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.