Amazon.com vs McKesson Which Is a Smarter Choice?

Amazon.com and McKesson are two powerhouse companies in the retail and healthcare industries, respectively. Both stocks are highly sought after by investors looking to capitalize on the growth potential of these sectors. Amazon.com's dominance in e-commerce and continuous innovation in technology has propelled its stock to new heights. On the other hand, McKesson's strong presence in the healthcare supply chain and distribution sector make it a reliable choice for those looking for stability and consistent growth. Investors are often torn between these two options, weighing the pros and cons of each company before making their investment decisions.

Amazon.com or McKesson?

When comparing Amazon.com and McKesson, 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 McKesson.

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 McKesson has a dividend yield of 0.46%. 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, McKesson reports a 5-year dividend growth of 9.71% year and a payout ratio of 12.89%.

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 48.22 and McKesson's P/E ratio at 29.40. 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 9.28 while McKesson's P/B ratio is -24.71.

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 McKesson's is 0.96%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and McKesson's ROE at -115.33%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $227.63 for Amazon.com and $575.86 for McKesson. Over the past year, Amazon.com's prices ranged from $144.05 to $231.20, with a yearly change of 60.50%. McKesson's prices fluctuated between $431.35 and $637.51, with a yearly change of 47.79%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.