Walmart vs Canadian Tire Which Should You Buy?

Walmart and Canadian Tire are two of the largest retail companies in Canada, each offering a wide range of products and services to consumers. Both companies have strong brand recognition and a presence in the Canadian market. Walmart is known for its low prices and expansive selection of goods, while Canadian Tire is renowned for its automotive and home improvement products. Investors may be interested in comparing the performance of these two stocks to determine which one offers better potential for growth and return on investment.

Walmart or Canadian Tire?

When comparing Walmart and Canadian Tire, 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 Canadian Tire.

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 0.96%, while Canadian Tire has a dividend yield of 4.13%. 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 41.18%. On the other hand, Canadian Tire reports a 5-year dividend growth of 11.12% year and a payout ratio of 93.42%.

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 43.56 and Canadian Tire's P/E ratio at 22.45. 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 8.02 while Canadian Tire's P/B ratio is 1.51.

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 Canadian Tire's is 0.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Walmart's ROE at 18.91% and Canadian Tire's ROE at 7.00%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $84.12 for Walmart and $109.70 for Canadian Tire. Over the past year, Walmart's prices ranged from $49.85 to $85.54, with a yearly change of 71.61%. Canadian Tire's prices fluctuated between $91.50 and $120.47, with a yearly change of 31.66%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.