PayPal vs Shopify Which Is a Smarter Choice?

PayPal and Shopify are two prominent players in the e-commerce and online payment industry, each offering unique investment opportunities for traders and investors. PayPal, a well-established and globally recognized digital payment platform, has shown consistent growth and innovation in recent years. On the other hand, Shopify, a rapidly growing e-commerce platform known for empowering entrepreneurs to start and grow their online businesses, has also seen strong performance in the market. Both stocks present distinct opportunities for investors looking to capitalize on the expanding digital economy.

PayPal or Shopify?

When comparing PayPal and Shopify, 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 PayPal and Shopify.

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. PayPal has a dividend yield of -%, while Shopify has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. PayPal reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Shopify 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 PayPal P/E ratio at 20.80 and Shopify's P/E ratio at 109.53. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. PayPal P/B ratio is 4.57 while Shopify's P/B ratio is 14.97.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, PayPal has seen a 5-year revenue growth of 1.07%, while Shopify's is 4.42%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with PayPal's ROE at 21.46% and Shopify's ROE at 14.85%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $87.84 for PayPal and $114.16 for Shopify. Over the past year, PayPal's prices ranged from $55.77 to $93.66, with a yearly change of 67.94%. Shopify's prices fluctuated between $48.56 and $120.72, with a yearly change of 148.60%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.