JD.com vs Alibaba Which Is More Profitable?

JD.com and Alibaba are two of the biggest players in the Chinese e-commerce market, both listed on the New York Stock Exchange. JD.com, often referred to as China's Amazon, is known for its focus on delivering high-quality products and excellent customer service. Alibaba, on the other hand, is a conglomerate that offers a wide range of services including e-commerce, cloud computing, and digital payments. Both companies have seen significant growth in recent years, but each has its own unique strengths and weaknesses that investors should consider before choosing to invest in either stock.

JD.com or Alibaba?

When comparing JD.com and Alibaba, 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 JD.com and Alibaba.

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. JD.com has a dividend yield of 1.84%, while Alibaba has a dividend yield of 2.86%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. JD.com reports a 5-year dividend growth of 0.00% year and a payout ratio of 19.32%. On the other hand, Alibaba reports a 5-year dividend growth of 0.00% year and a payout ratio of 54.40%.

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 JD.com P/E ratio at 13.05 and Alibaba's P/E ratio at 19.15. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. JD.com P/B ratio is 1.99 while Alibaba's P/B ratio is 1.73.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, JD.com has seen a 5-year revenue growth of 1.12%, while Alibaba's is 2.38%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with JD.com's ROE at 15.45% and Alibaba's ROE at 8.88%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $40.53 for JD.com and $91.83 for Alibaba. Over the past year, JD.com's prices ranged from $20.82 to $47.82, with a yearly change of 129.68%. Alibaba's prices fluctuated between $66.63 and $117.82, with a yearly change of 76.83%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.