Amazon.com vs PayPal Which Is More Favorable?

Amazon.com and PayPal are two of the biggest players in the e-commerce and digital payment industries. Amazon.com, the e-commerce giant, has experienced rapid growth and success in recent years, while PayPal has established itself as a leading online payment platform. Both companies have seen their stocks perform well, but they have different business models and growth trajectories. Investors often compare the two stocks to determine which one offers better long-term potential for growth and profitability.

Amazon.com or PayPal?

When comparing Amazon.com and PayPal, 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 PayPal.

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 PayPal 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, PayPal 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 45.08 and PayPal's P/E ratio at 20.01. 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 8.68 while PayPal's P/B ratio is 4.39.

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 PayPal's is 1.07%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and PayPal's ROE at 21.46%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $209.25 for Amazon.com and $86.08 for PayPal. Over the past year, Amazon.com's prices ranged from $139.52 to $215.08, with a yearly change of 54.16%. PayPal's prices fluctuated between $55.27 and $87.92, with a yearly change of 59.06%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.