Amazon.com vs Etsy Which Should You Buy?

Amazon.com and Etsy are two of the most popular e-commerce platforms in the world, each offering unique opportunities for investors. Amazon dominates the market with its diverse range of products and services, while Etsy focuses on handmade and vintage goods from independent sellers. Both companies have seen strong growth in recent years, but their stock performance has varied. Investors must weigh the potential for profit against the risks associated with each company's business model and market competition.

Amazon.com or Etsy?

When comparing Amazon.com and Etsy, 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 Etsy.

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

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 44.53 and Etsy's P/E ratio at 22.71. 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 8.57 while Etsy's P/B ratio is -9.33.

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 Etsy's is 3.72%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and Etsy's ROE at -43.01%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $210.89 for Amazon.com and $50.64 for Etsy. Over the past year, Amazon.com's prices ranged from $139.52 to $215.90, with a yearly change of 54.74%. Etsy's prices fluctuated between $47.10 and $89.58, with a yearly change of 90.19%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.