Canara Bank vs IDFC First Bank Which Should You Buy?

Canara Bank and IDFC First Bank are two prominent banking institutions in India, both offering a range of financial services to customers. Canara Bank has a long-standing history and is known for its stability and trustworthiness in the market. On the other hand, IDFC First Bank is a newer entrant with a focus on digital banking solutions and customer-centric services. Both banks have their unique strengths and weaknesses, making them interesting options for investors looking to diversify their portfolio in the banking sector.

Canara Bank or IDFC First Bank?

When comparing Canara Bank and IDFC First 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 IDFC First 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 3.17%, while IDFC First Bank has a dividend yield of -%. 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, IDFC First Bank reports a 5-year dividend growth of 0.00% 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 5.75 and IDFC First Bank's P/E ratio at 21.62. 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 0.90 while IDFC First Bank's P/B ratio is 1.36.

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 2.09%, while IDFC First Bank's is 6.82%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Canara Bank's ROE at 16.75% and IDFC First Bank's ROE at 7.11%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹101.12 for Canara Bank and ₹66.00 for IDFC First Bank. Over the past year, Canara Bank's prices ranged from ₹77.80 to ₹128.90, with a yearly change of 65.68%. IDFC First Bank's prices fluctuated between ₹59.30 and ₹92.45, with a yearly change of 55.90%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.