Walmart vs Alibaba Which Should You Buy?

Walmart and Alibaba are two retail giants with significant presence in the global marketplace. While Walmart is well-established in traditional brick-and-mortar stores, Alibaba dominates the e-commerce sector in China. Both companies have seen substantial growth in their stocks over the years, but their business models and strategies differ greatly. Walmart focuses on physical stores and expanding its online presence, while Alibaba thrives on a digital platform connecting buyers and sellers. Understanding the key differences between these two powerhouse stocks is crucial for investors looking to diversify their portfolios.

Walmart or Alibaba?

When comparing Walmart 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 Walmart 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. Walmart has a dividend yield of 0.88%, while Alibaba has a dividend yield of 3.01%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Walmart reports a 5-year dividend growth of 1.85% year and a payout ratio of 33.23%. 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 Walmart P/E ratio at 38.50 and Alibaba's P/E ratio at 18.25. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Walmart P/B ratio is 8.60 while Alibaba's P/B ratio is 1.65.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Walmart has seen a 5-year revenue growth of 0.34%, while Alibaba's is 2.38%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Walmart's ROE at 23.31% and Alibaba's ROE at 8.88%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $93.04 for Walmart and $87.24 for Alibaba. Over the past year, Walmart's prices ranged from $50.51 to $96.18, with a yearly change of 90.41%. 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.