AutoZone vs Canadian Tire Which Should You Buy?

AutoZone and Canadian Tire are two leading retailers in the automotive industry, both offering a wide range of products and services to customers. AutoZone, based in the US, specializes in automotive parts and accessories, while Canadian Tire, based in Canada, is a diversified retailer that also offers automotive products. Investors looking to compare the stocks of these two companies will need to consider factors such as market performance, financial health, and growth potential. This analysis will provide insights into which stock may be a better investment option.

AutoZone or Canadian Tire?

When comparing AutoZone and Canadian Tire, 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 AutoZone and Canadian Tire.

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. AutoZone has a dividend yield of -%, while Canadian Tire has a dividend yield of 4.13%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. AutoZone reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Canadian Tire reports a 5-year dividend growth of 11.12% year and a payout ratio of 93.42%.

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 AutoZone P/E ratio at 20.73 and Canadian Tire's P/E ratio at 22.45. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. AutoZone P/B ratio is -11.62 while Canadian Tire's P/B ratio is 1.51.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, AutoZone has seen a 5-year revenue growth of 1.27%, while Canadian Tire's is 0.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with AutoZone's ROE at -54.23% and Canadian Tire's ROE at 7.00%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $3117.96 for AutoZone and $109.70 for Canadian Tire. Over the past year, AutoZone's prices ranged from $2510.00 to $3256.37, with a yearly change of 29.74%. Canadian Tire's prices fluctuated between $91.50 and $120.47, with a yearly change of 31.66%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.