Best Buy vs GameStop Which Is More Attractive?

Best Buy and GameStop are two prominent players in the retail industry, with a focus on consumer electronics and video game products, respectively. Both companies have seen fluctuations in their stock prices in recent years, due to changing market trends and shifts in consumer preferences. Best Buy has developed a strong online presence and reputation for customer service, while GameStop has faced challenges in adapting to the digital age. Investors have differing opinions on the potential growth prospects of these two retail giants.

Best Buy or GameStop?

When comparing Best Buy and GameStop, 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 GameStop.

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 GameStop 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, GameStop 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 GameStop's P/E ratio at 253.93. 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 GameStop's P/B ratio is 2.46.

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 GameStop's is -0.15%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Best Buy's ROE at 39.46% and GameStop's ROE at 2.05%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $87.23 for Best Buy and $27.75 for GameStop. Over the past year, Best Buy's prices ranged from $69.29 to $103.71, with a yearly change of 49.68%. GameStop's prices fluctuated between $9.95 and $64.83, with a yearly change of 551.56%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.