Amazon.com vs Shoprite Which Is a Smarter Choice?

Amazon.com and Shoprite are two major retailers with stocks that have been closely watched by investors. Amazon.com, often seen as a disruptor in the traditional retail industry, has experienced significant growth and dominance in the e-commerce market. On the other hand, Shoprite, a leading supermarket chain in Africa, has faced challenges in recent years due to economic and political instability in the region. Investors are constantly comparing the stocks of these two companies to determine which offers the best investment opportunity.

Amazon.com or Shoprite?

When comparing Amazon.com and Shoprite, 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 Shoprite.

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 Shoprite has a dividend yield of 1.14%. 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, Shoprite reports a 5-year dividend growth of -7.20% year and a payout ratio of 55.31%.

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 43.99 and Shoprite's P/E ratio at 19.02. 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 8.47 while Shoprite's P/B ratio is 0.33.

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 Shoprite's is 0.52%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and Shoprite's ROE at 1.79%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $206.01 for Amazon.com and $16.99 for Shoprite. Over the past year, Amazon.com's prices ranged from $139.52 to $212.25, with a yearly change of 52.13%. Shoprite's prices fluctuated between $11.98 and $18.18, with a yearly change of 51.75%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.