CEAT vs Goodyear Which Should You Buy?

CEAT Limited and Goodyear Tire & Rubber Company are two prominent players in the global tire market. Both companies have a rich history and solid track record in the industry. CEAT, an Indian tire manufacturer, has been steadily growing its presence in the market with a focus on innovation and quality. On the other hand, Goodyear, an American multinational tire company, has a strong brand reputation and a diverse product portfolio. Investors looking to bet on the tire industry should carefully analyze the financial performance and growth potential of both CEAT and Goodyear stocks.

CEAT or Goodyear?

When comparing CEAT and Goodyear, 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 CEAT and Goodyear.

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. CEAT has a dividend yield of 0.97%, while Goodyear has a dividend yield of 4.0%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. CEAT reports a 5-year dividend growth of 0.85% year and a payout ratio of 0.00%. On the other hand, Goodyear reports a 5-year dividend growth of 0.00% year and a payout ratio of 45.13%.

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 CEAT P/E ratio at 22.12 and Goodyear's P/E ratio at 11.29. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. CEAT P/B ratio is 2.98 while Goodyear's P/B ratio is 0.35.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, CEAT has seen a 5-year revenue growth of 0.70%, while Goodyear's is 0.62%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CEAT's ROE at 14.10% and Goodyear's ROE at 3.14%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹3075.00 for CEAT and ฿174.00 for Goodyear. Over the past year, CEAT's prices ranged from ₹2210.15 to ₹3263.00, with a yearly change of 47.64%. Goodyear's prices fluctuated between ฿135.00 and ฿197.50, with a yearly change of 46.30%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.