Yelp vs Groupon Which Is a Smarter Choice?

Yelp and Groupon are two popular online platforms that offer services to consumers and businesses. Yelp focuses on user reviews and recommendations for local businesses, while Groupon offers deals and discounts for various products and services. Both companies have seen fluctuations in their stock prices over the years, with Yelp facing challenges in monetizing its platform and Groupon struggling to compete with larger e-commerce companies. Investors should carefully consider the unique strengths and weaknesses of each company before making investment decisions.

Yelp or Groupon?

When comparing Yelp and Groupon, 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 Yelp and Groupon.

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. Yelp has a dividend yield of -%, while Groupon has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Yelp reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Groupon 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 Yelp P/E ratio at 22.49 and Groupon's P/E ratio at 25.32. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Yelp P/B ratio is 3.59 while Groupon's P/B ratio is 12.23.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Yelp has seen a 5-year revenue growth of 0.82%, while Groupon's is -0.82%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Yelp's ROE at 16.02% and Groupon's ROE at 95.71%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $38.91 for Yelp and $12.09 for Groupon. Over the past year, Yelp's prices ranged from $32.56 to $48.99, with a yearly change of 50.46%. Groupon's prices fluctuated between $7.75 and $19.56, with a yearly change of 152.39%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.