Macy's vs Walmart

Macy's and Walmart are two retail giants with vastly different business models and customer bases. Macy's, a traditional department store, has faced challenges in recent years due to the rise of e-commerce and changing consumer preferences. Walmart, on the other hand, has thrived as a one-stop shop for everyday necessities at low prices. Investors may weigh the stability of Walmart's sales against the potential for a turnaround at Macy's when considering investing in these stocks.

Macy's or Walmart?

When comparing Macy's and Walmart, 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 Macy's and Walmart.

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. Macy's has a dividend yield of 5.5%, while Walmart has a dividend yield of 1.0%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Macy's reports a 5-year dividend growth of -15.21% year and a payout ratio of 101.63%. On the other hand, Walmart reports a 5-year dividend growth of 1.85% year and a payout ratio of 41.18%.

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 Macy's P/E ratio at 23.60 and Walmart's P/E ratio at 42.23. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Macy's P/B ratio is 1.01 while Walmart's P/B ratio is 7.78.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Macy's has seen a 5-year revenue growth of 0.04%, while Walmart's is 0.34%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Macy's's ROE at 4.39% and Walmart's ROE at 18.91%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $15.31 for Macy's and $80.52 for Walmart. Over the past year, Macy's's prices ranged from $10.59 to $22.10, with a yearly change of 108.69%. Walmart's prices fluctuated between $49.85 and $81.82, with a yearly change of 64.14%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.