First Bank vs Bandhan Bank Which Is More Reliable?

First Bank and Bandhan Bank are two prominent financial institutions in the Indian banking sector. First Bank, established in 1906, has a long-standing reputation for stability and reliability. On the other hand, Bandhan Bank, founded in 2014, has quickly risen to prominence with its focus on microfinance and small-scale lending. Investors looking to diversify their portfolio may consider comparing the stocks of these two banks to assess their financial health, growth potential, and overall performance in the market.

First Bank or Bandhan Bank?

When comparing First Bank and Bandhan 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 First Bank and Bandhan 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. First Bank has a dividend yield of 1.64%, while Bandhan Bank has a dividend yield of 0.88%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. First Bank reports a 5-year dividend growth of 14.87% year and a payout ratio of 14.99%. On the other hand, Bandhan 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 First Bank P/E ratio at 9.17 and Bandhan Bank's P/E ratio at 9.81. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. First Bank P/B ratio is 0.92 while Bandhan Bank's P/B ratio is 1.15.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, First Bank has seen a 5-year revenue growth of 0.36%, while Bandhan Bank's is 1.80%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with First Bank's ROE at 10.37% and Bandhan Bank's ROE at 12.61%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $14.56 for First Bank and ₹165.61 for Bandhan Bank. Over the past year, First Bank's prices ranged from $11.20 to $15.87, with a yearly change of 41.70%. Bandhan Bank's prices fluctuated between ₹162.80 and ₹263.10, with a yearly change of 61.61%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.