First Bank vs Federal Bank Which Is Stronger?

First Bank and Federal Bank are two well-known financial institutions that have been serving customers for many years. Both banks are publicly traded companies, offering investors the opportunity to purchase stocks in their companies. Investors often compare the performance of these two banks to determine which one is a better investment option. While First Bank may have a larger presence in the market, Federal Bank is known for its stability and strong financial performance. Ultimately, the decision to invest in either bank will depend on individual financial goals and risk tolerance.

First Bank or Federal Bank?

When comparing First Bank and Federal 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 Federal 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 2.01%, while Federal Bank has a dividend yield of 0.58%. 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 14.95%. On the other hand, Federal Bank reports a 5-year dividend growth of 2.13% 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 9.37 and Federal Bank's P/E ratio at 12.31. 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 0.94 while Federal Bank's P/B ratio is 1.56.

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 1.46%, while Federal Bank's is 3.06%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with First Bank's ROE at 10.37% and Federal Bank's ROE at 13.68%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $14.94 for First Bank and ₹203.90 for Federal Bank. Over the past year, First Bank's prices ranged from $11.20 to $15.87, with a yearly change of 41.70%. Federal Bank's prices fluctuated between ₹139.40 and ₹208.20, with a yearly change of 49.35%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.