Ally Financial vs IGM Financial Which Is a Better Investment?

Ally Financial and IGM Financial are two prominent players in the financial services industry. Ally Financial, a leading digital financial services company, offers a range of banking and automotive financing solutions. On the other hand, IGM Financial is a Canadian financial services company that provides wealth management and mutual fund products to its clients. Both companies have seen fluctuations in their stock prices over the past year, making them interesting options for investors looking to diversify their portfolios. In this comparison, we will delve deeper into the performance and prospects of Ally Financial and IGM Financial stocks.

Ally Financial or IGM Financial?

When comparing Ally Financial and IGM Financial, 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 Ally Financial and IGM Financial.

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. Ally Financial has a dividend yield of 3.2%, while IGM Financial has a dividend yield of 4.94%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Ally Financial reports a 5-year dividend growth of 16.47% year and a payout ratio of 54.41%. On the other hand, IGM Financial reports a 5-year dividend growth of -0.25% year and a payout ratio of 48.70%.

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 Ally Financial P/E ratio at 13.04 and IGM Financial's P/E ratio at 10.38. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Ally Financial P/B ratio is 0.78 while IGM Financial's P/B ratio is 1.52.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Ally Financial has seen a 5-year revenue growth of 1.15%, while IGM Financial's is -0.03%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Ally Financial's ROE at 6.31% and IGM Financial's ROE at 15.62%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $37.52 for Ally Financial and $33.41 for IGM Financial. Over the past year, Ally Financial's prices ranged from $31.77 to $45.46, with a yearly change of 43.07%. IGM Financial's prices fluctuated between $22.81 and $33.94, with a yearly change of 48.79%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.