Auto Trader vs Cars.com Which Is Superior?

Auto Trader and Cars.com are two major players in the automotive online marketplace industry. Auto Trader, based in the UK, is a leading digital automotive marketplace connecting buyers and sellers. On the other hand, Cars.com, based in the US, operates a similar platform connecting consumers with automotive dealers. Both companies have seen fluctuations in their stock prices in recent years as they navigate the competitive online automotive marketplace. Investors interested in this industry should closely monitor the performance of Auto Trader and Cars.com stocks.

Auto Trader or Cars.com?

When comparing Auto Trader and Cars.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 Auto Trader and Cars.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. Auto Trader has a dividend yield of 1.3%, while Cars.com has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Auto Trader reports a 5-year dividend growth of 0.00% year and a payout ratio of 31.30%. On the other hand, Cars.com 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 Auto Trader P/E ratio at 6.95 and Cars.com's P/E ratio at 32.67. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Auto Trader P/B ratio is 3.23 while Cars.com's P/B ratio is 2.55.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Auto Trader has seen a 5-year revenue growth of 0.56%, while Cars.com's is 0.10%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Auto Trader's ROE at 47.03% and Cars.com's ROE at 7.95%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $2.52 for Auto Trader and $18.61 for Cars.com. Over the past year, Auto Trader's prices ranged from $2.04 to $3.00, with a yearly change of 47.06%. Cars.com's prices fluctuated between $15.05 and $21.24, with a yearly change of 41.13%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.