Yelp vs Yellow Pages Which Is a Better Investment?

Yelp and Yellow Pages are two well-known companies in the business directory and review industry. Yelp, founded in 2004, is known for its comprehensive online platform that allows users to rate and review businesses. On the other hand, Yellow Pages, established in 1883, has a long-standing history as a traditional print directory. Both companies have seen fluctuations in their stock prices in recent years due to shifts in consumer behavior and the rise of online search engines. In this analysis, we will compare the performance and prospects of Yelp and Yellow Pages stocks to determine which may be the better investment opportunity.

Yelp or Yellow Pages?

When comparing Yelp and Yellow Pages, 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 Yellow Pages.

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 Yellow Pages has a dividend yield of 8.13%. 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, Yellow Pages reports a 5-year dividend growth of 0.00% year and a payout ratio of 36.28%.

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 22.89 and Yellow Pages's P/E ratio at 4.07. 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 3.65 while Yellow Pages's P/B ratio is 2.59.

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 Yellow Pages's is -0.24%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Yelp's ROE at 16.02% and Yellow Pages's ROE at 61.54%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $40.17 for Yelp and $7.44 for Yellow Pages. Over the past year, Yelp's prices ranged from $32.56 to $48.99, with a yearly change of 50.46%. Yellow Pages's prices fluctuated between $6.37 and $8.61, with a yearly change of 35.10%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.