Eicher Motors vs Ashok Leyland Which Is a Better Investment?

Eicher Motors and Ashok Leyland are two prominent players in the Indian automotive industry, particularly in the commercial vehicle segment. Eicher Motors, known for its iconic Royal Enfield motorcycles, has seen steady growth in its stock value over the years. Ashok Leyland, on the other hand, is one of the largest manufacturers of commercial vehicles in India, facing stiff competition and market challenges. Investors are closely monitoring the performance of both stocks to make informed investment decisions in this dynamic sector.

Eicher Motors or Ashok Leyland?

When comparing Eicher Motors and Ashok Leyland, 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 Eicher Motors and Ashok Leyland.

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. Eicher Motors has a dividend yield of 1.06%, while Ashok Leyland has a dividend yield of 3.02%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Eicher Motors reports a 5-year dividend growth of -19.58% year and a payout ratio of 0.00%. On the other hand, Ashok Leyland reports a 5-year dividend growth of 1.36% 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 Eicher Motors P/E ratio at 30.87 and Ashok Leyland's P/E ratio at 25.73. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Eicher Motors P/B ratio is 6.94 while Ashok Leyland's P/B ratio is 6.56.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Eicher Motors has seen a 5-year revenue growth of 0.66%, while Ashok Leyland's is 0.39%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Eicher Motors's ROE at 24.05% and Ashok Leyland's ROE at 24.83%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹4775.00 for Eicher Motors and ₹229.34 for Ashok Leyland. Over the past year, Eicher Motors's prices ranged from ₹3562.45 to ₹5105.00, with a yearly change of 43.30%. Ashok Leyland's prices fluctuated between ₹157.55 and ₹264.65, with a yearly change of 67.98%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.