GameStop vs Best Buy Which Offers More Value?

GameStop and Best Buy are two well-known retail companies that have seen contrasting fortunes in the stock market. While GameStop has experienced a surge in stock prices fueled by online trading communities like WallStreetBets, Best Buy has maintained a more stable performance. This discrepancy highlights the volatile nature of the stock market and the impact of social media on stock prices. Investors are closely monitoring these two companies to determine their future trajectories.

GameStop or Best Buy?

When comparing GameStop and Best Buy, 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 Best Buy.

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 Best Buy has a dividend yield of 3.22%. 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, Best Buy reports a 5-year dividend growth of 15.38% year and a payout ratio of 63.39%.

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 Best Buy's P/E ratio at 14.82. 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 Best Buy's P/B ratio is 6.11.

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 Best Buy's is 0.47%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with GameStop's ROE at 2.13% and Best Buy's ROE at 41.22%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $27.92 for GameStop and $87.05 for Best Buy. Over the past year, GameStop's prices ranged from $9.95 to $64.83, with a yearly change of 551.56%. Best Buy's prices fluctuated between $69.29 and $103.71, with a yearly change of 49.68%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.