CarMax vs Enterprise Which Is More Attractive?

CarMax and Enterprise are two well-known companies in the automotive industry, each offering a unique approach to selling and leasing vehicles. CarMax is a retailer that specializes in selling used cars with a no-haggle pricing strategy, while Enterprise operates a rental car service and also offers car-sharing and car sales. Both companies have seen fluctuations in their stock prices due to economic and industry-specific factors, making them potential investment options for those interested in the automotive sector.

CarMax or Enterprise?

When comparing CarMax and Enterprise, 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 CarMax and Enterprise.

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. CarMax has a dividend yield of -%, while Enterprise has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. CarMax reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Enterprise 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 CarMax P/E ratio at 28.66 and Enterprise's P/E ratio at 13.50. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. CarMax P/B ratio is 1.94 while Enterprise's P/B ratio is 2.05.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, CarMax has seen a 5-year revenue growth of 0.99%, while Enterprise's is 0.81%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CarMax's ROE at 6.83% and Enterprise's ROE at 17.41%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $75.63 for CarMax and $1.32 for Enterprise. Over the past year, CarMax's prices ranged from $62.45 to $88.22, with a yearly change of 41.27%. Enterprise's prices fluctuated between $0.49 and $2.10, with a yearly change of 328.57%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.