Hero MotoCorp vs Bajaj Auto Which Should You Buy?

Hero MotoCorp and Bajaj Auto are two leading players in the Indian automotive industry, known for their diverse range of motorcycles and two-wheelers. Both companies have a strong presence in the market and a loyal customer base. However, when it comes to their stocks, there are differences in their performance and growth trajectory. Hero MotoCorp has been a consistent performer with steady growth, while Bajaj Auto has shown more volatility in its stock prices. Investors need to carefully analyze and compare the factors influencing their stock performance before making investment decisions.

Hero MotoCorp or Bajaj Auto?

When comparing Hero MotoCorp and Bajaj Auto, 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 Hero MotoCorp and Bajaj Auto.

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. Hero MotoCorp has a dividend yield of 1.37%, while Bajaj Auto has a dividend yield of 0.81%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Hero MotoCorp reports a 5-year dividend growth of 1.03% year and a payout ratio of 0.00%. On the other hand, Bajaj Auto reports a 5-year dividend growth of 18.47% 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 Hero MotoCorp P/E ratio at 23.31 and Bajaj Auto's P/E ratio at 37.51. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Hero MotoCorp P/B ratio is 5.33 while Bajaj Auto's P/B ratio is 8.93.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Hero MotoCorp has seen a 5-year revenue growth of 0.13%, while Bajaj Auto's is 0.55%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Hero MotoCorp's ROE at 22.99% and Bajaj Auto's ROE at 24.94%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹4717.55 for Hero MotoCorp and ₹9800.00 for Bajaj Auto. Over the past year, Hero MotoCorp's prices ranged from ₹3102.10 to ₹6246.25, with a yearly change of 101.36%. Bajaj Auto's prices fluctuated between ₹5395.55 and ₹12774.00, with a yearly change of 136.75%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.