StoneCo vs MercadoLibre Which Is More Profitable?

StoneCo and MercadoLibre are two prominent players in the Latin American e-commerce and fintech sectors. StoneCo, based in Brazil, specializes in providing payment processing solutions for businesses, while MercadoLibre, headquartered in Argentina, is one of the largest online marketplaces in the region. Both companies have experienced significant growth in recent years, attracting investors looking to capitalize on the expanding digital economy in Latin America. This analysis will compare the performance and potential of StoneCo and MercadoLibre stocks.

StoneCo or MercadoLibre?

When comparing StoneCo and MercadoLibre, 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 StoneCo and MercadoLibre.

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. StoneCo has a dividend yield of -%, while MercadoLibre has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. StoneCo reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, MercadoLibre 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 StoneCo P/E ratio at 8.08 and MercadoLibre's P/E ratio at 66.00. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. StoneCo P/B ratio is 1.09 while MercadoLibre's P/B ratio is 23.70.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, StoneCo has seen a 5-year revenue growth of 5.13%, while MercadoLibre's is 7.91%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with StoneCo's ROE at 13.73% and MercadoLibre's ROE at 40.71%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $8.87 for StoneCo and $1870.77 for MercadoLibre. Over the past year, StoneCo's prices ranged from $8.87 to $19.46, with a yearly change of 119.39%. MercadoLibre's prices fluctuated between $1324.99 and $2161.73, with a yearly change of 63.15%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.