THG vs Shopify Which Is a Better Investment?

The Home Depot (THG) and Shopify are two companies that have seen significant growth in recent years. THG, a leading home improvement retailer, has benefited from the rise in home renovation projects during the pandemic. Shopify, an e-commerce platform, has become the go-to choice for businesses looking to establish an online presence. Both stocks have performed well in the market, but their underlying business models and growth prospects differ. Let's compare THG vs Shopify stocks to see which may be a better investment option.

THG or Shopify?

When comparing THG 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 THG 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. THG 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. THG 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 THG P/E ratio at -2.90 and Shopify's P/E ratio at 106.97. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. THG P/B ratio is 0.75 while Shopify's P/B ratio is 14.62.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, THG has seen a 5-year revenue growth of 0.67%, while Shopify's is 4.42%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with THG's ROE at -24.45% and Shopify's ROE at 14.85%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are £51.30 for THG and $113.44 for Shopify. Over the past year, THG's prices ranged from £38.98 to £89.98, with a yearly change of 130.84%. 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.