Canadian Tire vs Amazon.com Which Should You Buy?

Canadian Tire and Amazon.com are two prominent retail giants in the market, each with a unique approach to their business model. Canadian Tire, a traditional brick-and-mortar retailer, has a strong presence in Canada and offers a wide range of products including automotive, tools, and home goods. On the other hand, Amazon.com is an e-commerce powerhouse known for its vast selection and convenience. Both companies have seen significant growth in their stock prices over the years, but their performance and potential for future growth may differ due to their distinct strategies and market positioning.

Canadian Tire or Amazon.com?

When comparing Canadian Tire 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 Canadian Tire 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. Canadian Tire has a dividend yield of 4.13%, while Amazon.com has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Canadian Tire reports a 5-year dividend growth of 11.12% year and a payout ratio of 93.42%. 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 Canadian Tire P/E ratio at 22.45 and Amazon.com's P/E ratio at 43.56. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Canadian Tire P/B ratio is 1.51 while Amazon.com's P/B ratio is 8.38.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Canadian Tire has seen a 5-year revenue growth of 0.37%, while Amazon.com's is 1.33%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Canadian Tire's ROE at 7.00% 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 $109.70 for Canadian Tire and $205.59 for Amazon.com. Over the past year, Canadian Tire's prices ranged from $91.50 to $120.47, with a yearly change of 31.66%. Amazon.com's prices fluctuated between $139.52 and $212.25, with a yearly change of 52.13%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.