Best Buy vs Amazon.com Which Is Stronger?

Best Buy and Amazon.com are two giants in the retail industry, each offering a unique shopping experience for consumers. While Best Buy focuses on physical stores and specializes in electronics and appliances, Amazon.com dominates the e-commerce market with a vast selection of products and services. Both companies have seen significant growth in their stocks over the years, but they appeal to different types of investors. Understanding their respective strengths and weaknesses can help investors make informed decisions in the stock market.

Best Buy or Amazon.com?

When comparing Best Buy and Amazon.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 Best Buy and Amazon.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. Best Buy has a dividend yield of 4.28%, while Amazon.com has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Best Buy reports a 5-year dividend growth of 15.38% year and a payout ratio of 63.39%. On the other hand, Amazon.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 Best Buy P/E ratio at 14.83 and Amazon.com's P/E ratio at 47.61. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Best Buy P/B ratio is 5.18 while Amazon.com's P/B ratio is 9.16.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Best Buy has seen a 5-year revenue growth of 0.47%, while Amazon.com's is 1.33%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Best Buy's ROE at 39.46% and Amazon.com's ROE at 21.82%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $87.23 for Best Buy and $225.69 for Amazon.com. Over the past year, Best Buy's prices ranged from $69.29 to $103.71, with a yearly change of 49.68%. Amazon.com's prices fluctuated between $143.64 and $230.08, with a yearly change of 60.18%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.