First Bank vs IDFC First Bank Which Should You Buy?

First Bank and IDFC First Bank are two prominent players in the banking industry. First Bank is a well-established financial institution with a strong presence in the market, while IDFC First Bank is a relatively newer entrant with a focus on innovation and technology. Both stocks offer investors the opportunity to take part in the growth of the banking sector, but their strategies and market positioning differ. Understanding the unique qualities and strengths of each company is essential for making informed investment decisions.

First Bank or IDFC First Bank?

When comparing First Bank and IDFC First 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 IDFC First 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 1.62%, while IDFC First Bank has a dividend yield of -%. 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, IDFC First 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 9.30 and IDFC First Bank's P/E ratio at 21.00. 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 0.93 while IDFC First Bank's P/B ratio is 1.32.

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 IDFC First Bank's is 3.12%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with First Bank's ROE at 10.37% and IDFC First Bank's ROE at 7.11%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $14.79 for First Bank and ₹64.17 for IDFC First Bank. Over the past year, First Bank's prices ranged from $11.20 to $15.87, with a yearly change of 41.70%. IDFC First Bank's prices fluctuated between ₹59.30 and ₹92.45, with a yearly change of 55.90%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.