Alibaba Group (NYSE:BABA) versus Canadian Tire (OTCMKTS:CDNAF) Head to Head Analysis

Canadian Tire (OTCMKTS:CDNAF) and Alibaba Group (NYSE:BABA) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Insider & Institutional Ownership

13.5% of Alibaba Group shares are held by institutional investors. 12.5% of Alibaba Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Canadian Tire and Alibaba Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Tire	$11.68 billion	0.62	$376.67 million	$7.53	18.21
Alibaba Group	$148.40 billion	1.89	$15.02 billion	$4.13	27.27

Alibaba Group has higher revenue and earnings than Canadian Tire. Canadian Tire is trading at a lower price-to-earnings ratio than Alibaba Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Canadian Tire pays an annual dividend of $5.13 per share and has a dividend yield of 3.7%. Alibaba Group pays an annual dividend of $1.03 per share and has a dividend yield of 0.9%. Canadian Tire pays out 68.1% of its earnings in the form of a dividend. Alibaba Group pays out 24.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares Canadian Tire and Alibaba Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Tire	4.09%	10.89%	3.41%
Alibaba Group	7.00%	4.79%	2.80%

Analyst Recommendations

This is a summary of recent ratings and target prices for Canadian Tire and Alibaba Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Tire	0	4	1	0	2.20
Alibaba Group	0	5	15	2	2.86

Canadian Tire currently has a consensus target price of $205.00, suggesting a potential upside of 49.53%. Alibaba Group has a consensus target price of $187.45, suggesting a potential upside of 66.43%. Given Alibaba Group’s stronger consensus rating and higher possible upside, analysts clearly believe Alibaba Group is more favorable than Canadian Tire.

Summary

Alibaba Group beats Canadian Tire on 12 of the 16 factors compared between the two stocks.

About Canadian Tire

Canadian Tire Corporation, Limited provides a range of retail goods and services in Canada. It operates in three segments: Retail, CT REIT, and Financial Services. The Retail segment retails automotive maintenance products and accessories, parts, and tires, as well as automotive services and roadside assistance; electrical, hardware, home environment, paint, plumbing, and tool products; cleaning, food & drink, home décor, home essentials, home organization, kitchen, and pet care products; camping, exercise, hockey, hunting, fishing, seasonal recreation, and team sports and golf products; and backyard living, backyard fun, cycling, gardening, outdoor tools, seasonal, and toy products. This segment offers its products under the Canadian Tire, Canadian Tire Gas, Pro Hockey Life, Mark's, PartSource, Helly Hansen, Party City, and SportChek brand names. This segment also participates in loyalty programs, as well as sells its products online. The CT REIT segment operates as a closed-end real estate investment trust that holds a portfolio of properties comprising Canadian Tire stores, Canadian Tire anchored retail developments, industrial properties, mixed-use commercial property, and development properties. The Financial Services segment provides consumer credit cards, in-store financing, insurance products, and retail and broker deposits; and savings accounts and guaranteed investment certificates. Canadian Tire Corporation, Limited was founded in 1922 and is headquartered in Toronto, Canada.

About Alibaba Group

Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao, a digital retail platform; Tmall, a third-party online and mobile commerce platform; Alimama, a monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.