Alibaba Group (BABA 0.71%) continues its dominance of e-commerce in China. As it builds additional retail inroads around the world, Alibaba seems poised to return to previous share prices. Target (TGT 0.56%) valuations currently sit higher than average for the company, an indication it might be closing on the heels of some of its biggest competitors. A small wallet of just $400 could get an investor multiple shares of either of these value stocks.

Alibaba seeks to maintain its position as king of the hill

While most of the world has recovered from pandemic lockdown woes, Alibaba Group continues to struggle amid China's zero-COVID policies. The slow ramping down of these policies, which started last November, gives hope to investors expecting the largest Asian e-commerce provider to return to form, and current share prices represent a deep discount versus those of only one or two years ago.

The company's focus on consumption, cloud computing, and expansive globalization puts it in a fairly unique position, giving it some specific angles that allow it to compete with Amazon and its AWS cloud offerings as well as Shopify and other huge players in these market spaces. The company credits a strong local logistics network for much of its continued success. A focus on continually adding value to its offerings sounds great to investors, but Alibaba must deliver on those promises.

Alibaba Group currently trades around $12.38 earnings per share, with price-to-earnings ratios hovering around 30 times for the year and with major shifts to as much as 205 times in previous quarters. Compared with Amazon's most recent loss of $0.27 per share and annual price-to-earnings hovering closer to 50 times, or Shopify's loss of $2.73 per share and respective price-to-earnings ratio closer to 60 times (with a recent spike to over 420), Alibaba appears to hold a very strong position moving forward. An initial investment of $400 could net four to five shares of this company ahead of an anticipated rebound.

Target begins to catch up to the bigger boys

Retail giant Target saw a great boom following the early pandemic days, with share prices ballooning from lows near $100 to over $250 last year. Share prices currently trade closer to $150, and earnings per share clock in around $6.02. While this represents a tapering from recent highs, market forces including inflation and supply chain logistics woes may well lie at the heart of the company's retraction instead of any internal oversight failure.

Target's price-to-earnings ratios look quite healthy at around 28 times in the most recent quarter, especially when compared to major competitors Walmart at 33 times or Costco at 36. These much larger companies continue to dominate much of the big-box retail space, but signs of continued strength abound for Target. The company's most recent dividend was $1.08 per common share, providing a yield of 2.8%, compared to yields of 1.6% and 0.7% respectively for Walmart and Costco.

Target also announced more than $3 billion in total revenue growth last year, continuing a trend that resulted in $30 million in such gains since 2019.

Much like Alibaba, Target has its focus on a long-term strategy. For the big-box retailer, that strategy includes growing revenue at each store as well as making smart capital investments for expansion.

Two paths to successful investing in retail for under $400

These two companies both bank heavily on growth and expansion to fuel their futures. As with all value stocks, buying in at the right time and allowing them to grow naturally within their markets can lead to investment success. Though they operate in very different spaces, with a strong internet and e-commerce presence for one and a more traditional brick-and-mortar retail on the other, these two companies offer both diversity and a strong platform from which to develop a small yet growing portfolio.