Long-term Investing in Amazon Stock: Products, Dividend, Financial Statements, and More
Amazon, a global powerhouse in e-commerce and cloud computing, has revolutionized the way we shop and do business online. 🌐🛍️
Contents
Products and Services 🔍
Amazon is not just an online store; it's a technological powerhouse shaping our future.
1. Amazon.com – The Everything Store 🛍️
Think of Amazon.com as your go-to shopping destination, where almost anything you need (or want!) is just a click away. From books to electronics, fashion to groceries, Amazon.com has revolutionized retail. It's like having a mega-mall at your fingertips, anytime, anywhere! 🌐
2. Amazon Web Services (AWS) – The Cloud Powerhouse ☁️
AWS is like the backbone of the internet! It provides cloud computing services to businesses, governments, and even your favorite apps. From data storage to machine learning, AWS is a key player behind the scenes, keeping the digital world spinning. 💻
3. Amazon Prime – More Than Just Fast Shipping 🚚
Amazon Prime isn't just about getting your orders super fast. It's a whole universe of entertainment and benefits! Think streaming movies, TV shows, and Amazon Originals with Prime Video 🎬, ad-free tunes with Prime Music 🎶, and exclusive deals just for Prime members. It's like a VIP pass to Amazon's world! 🌟
4. Echo & Alexa – Your Personal Assistants 🗣️
Imagine having a helper who listens and responds to your every command. That's Echo & Alexa for you! These smart devices can play music, control your smart home, give news updates, and even crack jokes. Just say "Alexa," and consider it done! 🤖
5. Astro – The Home Robot of Your Dreams 🤖
Astro is like a sci-fi dream come true! It's a home robot that can help with security, keep you connected with your loved ones, and even follow you around to play music or podcasts. It's like having a little robotic buddy at home! 🏠
6. Kindle – A Bookworm's Paradise 📚
For the readers out there, Kindle is a game-changer. Carry thousands of books in one slim device, buy new titles instantly, and read anywhere, anytime. It's like having a library in your pocket! 🤓
7. Amazon Go – Shopping of the Future 🛒
Step into Amazon Go, and experience shopping like never before – no lines, no checkouts! Just grab what you need and walk out. The store automatically charges your Amazon account. It's like magic shopping! ✨
Amazon's Competitive Edge 💪
What makes Amazon tick in the fiercely competitive market? Let's unravel its key competitive advantages.
1. The King of Customer Convenience 🛍️
Amazon is like that friend who always knows what you need, even before you do! Their focus on customer convenience is unmatched. Ever noticed how easy it is to find, compare, and purchase products on Amazon.com? Plus, with features like 1-Click ordering and personalized recommendations, shopping is a breeze. It's like they're mind readers or something! 🧠
2. The Wizard of Logistics and Distribution 📦
Amazon's logistics network is nothing short of wizardry. They've got this massive web of fulfillment centers, which means faster and more efficient delivery for us. Ever ordered something and got it the very next day? That's Amazon's logistics magic at work! It's like having a teleportation device for your online orders. 🚚✨
3. A Tech Titan Beyond Retail 🌐
Think Amazon is just about selling stuff? Think again! They're tech giants, with Amazon Web Services (AWS) leading the charge. AWS is a powerhouse in cloud computing, supporting everything from startups to big corporations. It's like Amazon is the invisible force keeping tons of apps and services running smoothly. 💻
Is CEO Competent and Honest? 👨💼👩💼
let's chat about a key figure at Amazon - none other than CEO Andy Jassy. Taking the helm after Jeff Bezos, Jassy isn't just a leader; he's a visionary who's steering the Amazon giant with skill and integrity.
Andy Jassy, the man at the top of Amazon, is known for his exceptional competence and straightforward honesty. He's not your average CEO; he's a leader who's grown with the company, understanding its every nook and cranny. Jassy spearheaded Amazon Web Services (AWS), turning it into a cloud computing powerhouse. It's like he had a map to the treasure and led the whole crew right to it! 💻🏆
His approach? It's all about long-term value and innovation. Jassy is the kind of guy who doesn't just look at the numbers; he looks at the stories behind them. He's committed to maintaining Amazon's customer-centric culture while pushing the boundaries of technology. Think of him as a captain who's not only navigating the ship through uncharted waters but also making sure everyone on board is heard and valued. 🗺️👥
Amazon's Mission 🌍
Amazon's mission serves as a great example of how a company should grow and evolve. Their direction could also be an important reference point for stock investments, couldn't it? 😊📚
1. Customer Obsession 🎯
Amazon's mission is pretty straightforward but powerful: "to be Earth's most customer-centric company." It's all about the customer! Every step they take, every new product they launch, is with the customer in mind. They're not just selling stuff; they're creating experiences that make our lives easier and happier. It's like they're the best friend you never knew you needed! 🤝
2. The Amazon Way 💡
- Customer Obsession: They start and end with the customer. It's all about exceeding customer expectations and thinking long-term.
- Innovation and Improvement: Amazon is like that smart cookie who never stops learning and evolving. They're always on the lookout for new ideas to make things better and more efficient. 🚀
- Operational Excellence: It's not just what they do; it's how they do it. Precision, efficiency, and effectiveness are their mantras. They're like a well-oiled machine, always running smoothly! 🛠️
- Long-Term Thinking: Amazon is in it for the long haul. They're not about quick wins but lasting impact. It's like planting a tree today to enjoy the shade years later. 🌳
Stock Prices and Returns 📈
As of 2024-09-14, the 5-year average annual stock return for Amazon is 15.3%. The stock has been rising significantly in the long term. Below is a chart showing the current stock price of Amazon.
Dividends 💰
Currently, Amazon is not paying any dividends.
Amazon has been choosing to reinvest all of its profits into its business for growth.
Financial Statements 📊
Let's dive into the financial statements, the 'report card' of a company. They're key to understanding its growth and figuring out if it's a smart investment choice. Join me in this exploration!
1. Revenue 🏦
Revenue is the total amount of money a company earns from selling its products. The annual revenue growth rate over the past year for Amazon is 12.28%. Additionally, the average annual revenue growth rate over 5 years is 19.09%. You can see that the revenue of Amazon has been growing in the long term.
2. Net Income💰
Net income refers to the amount a company makes after subtracting the costs of goods sold from its sales revenue. Over the past year, the net income of Amazon has 238.67%, indicating a growth 📈.
Meanwhile, the average annual net income over 5 years has been 29.68%, showing a growth trend. Don't forget that the increase in net profit becomes the ultimate performance indicator for a company.
3. Debt 💳
The debt-to-equity ratio of Amazon is 34%. This means that Amazon has less debt than equity, indicating sound debt management. Furthermore, when examining the debt ratio compared to net income, it stands at 193.08%. Even when compared to the annual net income, it can be said that Amazon has a relatively low amount of debt.
4. ROIC (Return on Invested Capital)💰
ROIC is a measure of how much net income a company earns with the capital it has at its disposal. The current ROIC of Amazon is 13.44%. The ROIC of Amazon is impressively high, indicating that it is generating high efficiency net income with limited capital. Meanwhile, the average ROIC over the last 5 years is 10.39%.
5. PER (Price to Earnings Ratio) 📊
The PER is an indicator that allows you to see how much the stock price is valued in relation to net earnings. A higher PER indicates that the stock price is overvalued. The current PER of Amazon is 44.84. Also, the 5-year average PER is 62.38. Since the current PER is lower than the average, it suggests that the stock is undervalued compared to usual.
Meanwhile, the Forward PER predicted by analysts is 38.61. As better performance is expected than current, there's a possibility that the stock price might rise.
6. PSR (Price/Sales Ratio) 📊
The PSR is an indicator that helps determine how high the stock price is in relation to the sales revenue. A higher PSR indicates that the stock price is considered overvalued. The current PSR of Amazon is 3.29. Also, the 5-year average PSR is 3.13. Since the current PSR value is higher than the average, it suggests that the stock is overvalued compared to normal.
7. Share Buyback 🔄
Currently, Amazon is not engaging in stock buybacks .
Advantages of Investing in Amazon 🌟
You might wonder, "What makes Amazon stand out among other stocks?"
1. Diverse Revenue Streams: Not Just an Online Store 🛍️
When we think of Amazon, we often think of online shopping. But wait, there's more! Amazon isn't just about selling stuff. They have their hands in numerous pies, from cloud computing with AWS to streaming with Prime Video. This diversity in revenue streams means Amazon isn't putting all its eggs in one basket, making it a potentially less risky bet for investors.
2. Innovation at Its Core: Always Ahead of the Curve 🚀
If there's one thing Amazon is known for, it's innovation. They're always thinking ahead, whether it's about drone deliveries, AI, or expanding into new markets. Investing in Amazon is like investing in a company that's not just riding the wave of technology – they're creating it. It's like having a crystal ball into the future of tech! 🔮
3. A History of Growth: The Numbers Speak for Themselves 📈
Let's talk growth. Amazon has shown impressive growth over the years. Yes, past performance isn't always indicative of future results, but Amazon's track record can give investors a sense of confidence. It's like betting on a winning horse that has consistently performed well race after race. 🏇
Disadvantages of Investing in Amazon ⚠️
It's always sunny in the world of investments, but every so often, we might encounter a bit of rain. So, let's put on our raincoats and explore some potential disadvantages and caveats of investing in Amazon. ☔
1. Intense Competition: In a League with Giants 🥊
Amazon isn't playing in a small sandbox. They're up against some heavy hitters in various sectors, from Walmart in retail to Google and Microsoft in cloud services. This intense competition means Amazon constantly needs to innovate and stay ahead. It's like being in a never-ending race with some of the fastest runners in the world. 🏃♂️💨
2. Regulatory and Legal Challenges: Navigating Choppy Waters ⚖️
With great power comes great scrutiny. Amazon has faced its fair share of regulatory and legal challenges, from antitrust concerns to labor issues. These challenges can impact the company's reputation and operations, making the investment waters a bit choppy. It's like sailing a boat where you're not quite sure when the next wave might hit. 🚢🌊
Amazon's Competitors 🏆
Let's take a friendly stroll through the market and meet some of Amazon's biggest competitors. It's like knowing the other players on the field before the big game! ⚽
1. Walmart: The Retail Juggernaut 🏪
First up is Walmart, a name synonymous with retail. While Amazon reigns online, Walmart holds the fort in physical stores and has been ramping up its online presence.
It's like the classic battle of brick-and-mortar meets e-commerce. With Walmart's extensive network and push into online shopping, they're a significant player in the retail game. 🛒
In the world of cloud computing, Microsoft's Azure is a formidable rival to Amazon Web Services (AWS). It's like watching two tech titans clashing in the cloud. Microsoft brings its legacy in software and enterprise solutions to the table, giving AWS a run for its money. 💻
Don't overlook Google Cloud! While it might seem like Google is all about search engines and ads, they're making big moves in cloud computing.
It's like the quiet contender slowly gaining ground. With Google's massive data-handling prowess, they're becoming a significant competitor in the cloud arena. 🔍
4. Alibaba: The Eastern Powerhouse 🐉
Heading over to the East, Alibaba is a force to be reckoned with. They're not just China's answer to Amazon; they're a global e-commerce and cloud computing powerhouse. Think of Alibaba as a dragon in the world of e-commerce, breathing fire with its massive scale and reach. 🌏
5. eBay: Niche and Secondhand Markets 🛍️
Let's not forget eBay, the veteran of online auctions and sales. While Amazon focuses on new products, eBay thrives in the niche and secondhand markets. It's like the treasure trove for unique finds and vintage gems. 🏺