Goodyear vs CEAT Which Is a Better Investment?

Goodyear and CEAT are two notable players in the global tire industry, each with its own unique strengths and market positions. Goodyear, an American company, is known for its technological innovation and strong presence in the North American market. CEAT, an Indian company, has a strong foothold in the Asian and European markets and is recognized for its competitive pricing and diverse product offerings. Investors looking to capitalize on the tire industry may consider comparing the performance and growth potential of Goodyear versus CEAT stocks.

Goodyear or CEAT?

When comparing Goodyear and CEAT, 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 Goodyear and CEAT.

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. Goodyear has a dividend yield of 4.0%, while CEAT has a dividend yield of 0.97%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Goodyear reports a 5-year dividend growth of 0.00% year and a payout ratio of 45.13%. On the other hand, CEAT reports a 5-year dividend growth of 0.85% 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 Goodyear P/E ratio at 11.29 and CEAT's P/E ratio at 22.12. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Goodyear P/B ratio is 0.35 while CEAT's P/B ratio is 2.98.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Goodyear has seen a 5-year revenue growth of 0.62%, while CEAT's is 0.70%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Goodyear's ROE at 3.14% and CEAT's ROE at 14.10%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ฿174.00 for Goodyear and ₹3075.00 for CEAT. Over the past year, Goodyear's prices ranged from ฿135.00 to ฿197.50, with a yearly change of 46.30%. CEAT's prices fluctuated between ₹2210.15 and ₹3263.00, with a yearly change of 47.64%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.