Amazon.com vs JD.com Which Is a Better Investment?

Amazon.com and JD.com are two of the biggest players in the e-commerce industry, both based in the United States and China respectively. While Amazon is a global giant with a strong market share in the US, JD.com dominates the Chinese market. Investors often compare the two companies when considering investing in the e-commerce sector. Amazon's stock has had a strong performance in recent years, but JD.com has also shown impressive growth. Understanding the differences between these two companies can help investors make informed decisions about their stock investments.

Amazon.com or JD.com?

When comparing Amazon.com and JD.com, 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 JD.com.

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 JD.com has a dividend yield of 0.27%. 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, JD.com reports a 5-year dividend growth of 0.00% year and a payout ratio of 21.68%.

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 JD.com's P/E ratio at 27.24. 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 JD.com's P/B ratio is 3.85.

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 JD.com's is 1.12%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and JD.com's ROE at 13.74%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $205.59 for Amazon.com and $38.62 for JD.com. Over the past year, Amazon.com's prices ranged from $139.52 to $212.25, with a yearly change of 52.13%. JD.com's prices fluctuated between $20.82 and $47.82, with a yearly change of 129.68%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.