GameStop vs Amazon.com Which Is a Better Investment?

GameStop and Amazon.com are two prominent players in the world of retail and e-commerce. GameStop, a traditional brick-and-mortar retailer, has faced challenges as the gaming industry shifts towards digital downloads. On the other hand, Amazon.com has enjoyed tremendous success as an e-commerce giant. The comparison between the two stocks is intriguing, as GameStop's stock has been volatile due to short squeeze and Reddit-fueled trading frenzy, while Amazon.com's stock has seen steady growth driven by its dominance in the online retail space.

GameStop or Amazon.com?

When comparing GameStop 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 GameStop 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. GameStop has a dividend yield of -%, while Amazon.com has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. GameStop reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. 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 GameStop P/E ratio at 194.33 and Amazon.com's P/E ratio at 47.90. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. GameStop P/B ratio is 2.55 while Amazon.com's P/B ratio is 9.22.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, GameStop has seen a 5-year revenue growth of -0.15%, while Amazon.com's is 1.33%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with GameStop's ROE at 2.13% 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 $27.92 for GameStop and $225.86 for Amazon.com. Over the past year, GameStop's prices ranged from $9.95 to $64.83, with a yearly change of 551.56%. Amazon.com's prices fluctuated between $144.05 and $231.20, with a yearly change of 60.50%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.