Canara Bank vs Federal Bank Which Is More Profitable?

Canara Bank and Federal Bank are two major players in the Indian banking sector, both offering a range of financial products and services to customers. While Canara Bank is a public sector bank with government ownership, Federal Bank is a private sector bank with a strong presence in South India. Investors often compare the stocks of these two banks to assess their performance, financial health, and growth prospects in the dynamic banking industry. This analysis can help investors make informed decisions about their investment portfolio.

Canara Bank or Federal Bank?

When comparing Canara 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 Canara 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. Canara Bank has a dividend yield of 3.02%, while Federal Bank has a dividend yield of 0.56%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Canara 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 Canara Bank P/E ratio at 6.04 and Federal Bank's P/E ratio at 12.63. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Canara Bank P/B ratio is 0.94 while Federal Bank's P/B ratio is 1.60.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Canara Bank has seen a 5-year revenue growth of 1.64%, while Federal Bank's is 0.83%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Canara Bank's ROE at 16.75% 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 ₹104.00 for Canara Bank and ₹209.70 for Federal Bank. Over the past year, Canara Bank's prices ranged from ₹82.69 to ₹128.90, with a yearly change of 55.88%. Federal Bank's prices fluctuated between ₹139.40 and ₹217.00, with a yearly change of 55.67%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.