Barclays vs Goldman Sachs Which Should You Buy?

Barclays and Goldman Sachs are both prominent investment banks with a significant presence in the financial markets. While Barclays has a long and storied history dating back over 300 years, Goldman Sachs is renowned for its top-notch investment banking services. Both companies are publicly traded and their stocks are closely followed by investors. This comparison will delve into the financial performance, market valuation, and overall outlook of Barclays versus Goldman Sachs stocks, shedding light on which may be the more attractive investment opportunity.

Barclays or Goldman Sachs?

When comparing Barclays and Goldman Sachs, 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 Barclays and Goldman Sachs.

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. Barclays has a dividend yield of 3.88%, while Goldman Sachs has a dividend yield of 1.96%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Barclays reports a 5-year dividend growth of 9.63% year and a payout ratio of 0.00%. On the other hand, Goldman Sachs reports a 5-year dividend growth of 27.23% year and a payout ratio of 36.22%.

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 Barclays P/E ratio at 36.56 and Goldman Sachs's P/E ratio at 15.62. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Barclays P/B ratio is 2.58 while Goldman Sachs's P/B ratio is 1.57.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Barclays has seen a 5-year revenue growth of -0.76%, while Goldman Sachs's is 0.57%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Barclays's ROE at 8.15% and Goldman Sachs's ROE at 10.23%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $13.51 for Barclays and $585.09 for Goldman Sachs. Over the past year, Barclays's prices ranged from $7.07 to $13.83, with a yearly change of 95.62%. Goldman Sachs's prices fluctuated between $372.07 and $612.73, with a yearly change of 64.68%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.