Bandhan Bank vs Federal Bank Which Is More Promising?

Bandhan Bank and Federal Bank are two prominent players in the Indian banking sector, each with its unique strengths and weaknesses. Bandhan Bank, known for its focus on microfinance and rural banking, has shown impressive growth in recent years. On the other hand, Federal Bank, with its extensive network and customer base, has been a steady performer in the market. Investors looking to diversify their portfolios may consider these two stocks for their potential growth and stability in the banking sector.

Bandhan Bank or Federal Bank?

When comparing Bandhan Bank and Federal Bank, 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 Bandhan Bank and Federal Bank.

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. Bandhan Bank has a dividend yield of 1.71%, while Federal Bank has a dividend yield of 0.58%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Bandhan Bank reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Federal Bank reports a 5-year dividend growth of 2.13% year and a payout ratio of 0.00%.

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 Bandhan Bank P/E ratio at 10.12 and Federal Bank's P/E ratio at 12.31. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Bandhan Bank P/B ratio is 1.19 while Federal Bank's P/B ratio is 1.56.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Bandhan Bank has seen a 5-year revenue growth of 1.84%, while Federal Bank's is 3.06%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Bandhan Bank's ROE at 12.61% and Federal Bank's ROE at 13.68%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹174.21 for Bandhan Bank and ₹203.90 for Federal Bank. Over the past year, Bandhan Bank's prices ranged from ₹167.30 to ₹263.10, with a yearly change of 57.26%. Federal Bank's prices fluctuated between ₹139.40 and ₹208.20, with a yearly change of 49.35%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.