CEAT vs MRF Which Is a Better Investment?

CEAT and MRF are two of the leading tire manufacturing companies in India, competing in the highly competitive automotive industry. Both companies have established strong presence in the market with a wide range of products catering to different segments. CEAT's focus on innovation and expansion has enabled them to gain a significant market share, while MRF's reputation for quality and reliability has also helped them maintain a strong position. Investors looking to invest in the tire industry may consider comparing the performance of CEAT and MRF stocks to make informed decisions.

CEAT or MRF?

When comparing CEAT and MRF, 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 MRF.

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 MRF has a dividend yield of 0.15%. 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, MRF reports a 5-year dividend growth of 23.87% 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 CEAT P/E ratio at 22.12 and MRF's P/E ratio at 28.45. 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 MRF's P/B ratio is 3.14.

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 MRF's is 0.57%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CEAT's ROE at 14.10% and MRF's ROE at 11.64%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹3075.00 for CEAT and ₹130416.20 for MRF. Over the past year, CEAT's prices ranged from ₹2210.15 to ₹3263.00, with a yearly change of 47.64%. MRF's prices fluctuated between ₹115500.05 and ₹151445.00, with a yearly change of 31.12%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.