MRF vs Apollo Tyres Which Is More Promising?

MRF and Apollo Tyres are two prominent players in the Indian tire manufacturing industry, both with a strong presence and reputation in the market. While MRF is known for its premium quality and high-end products, Apollo Tyres is recognized for its more affordable and value-for-money offerings. Investors looking to capitalize on the growth potential of the Indian automotive sector may consider investing in these stocks. However, factors such as competition, raw material prices, and global economic conditions can also impact their performance.

MRF or Apollo Tyres?

When comparing MRF and Apollo Tyres, 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 MRF and Apollo Tyres.

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. MRF has a dividend yield of 0.15%, while Apollo Tyres has a dividend yield of 1.1%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. MRF reports a 5-year dividend growth of 23.87% year and a payout ratio of 0.00%. On the other hand, Apollo Tyres reports a 5-year dividend growth of -30.12% 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 MRF P/E ratio at 29.01 and Apollo Tyres's P/E ratio at 24.01. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. MRF P/B ratio is 3.20 while Apollo Tyres's P/B ratio is 2.43.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, MRF has seen a 5-year revenue growth of 0.57%, while Apollo Tyres's is 0.30%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with MRF's ROE at 11.64% and Apollo Tyres's ROE at 10.53%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹130900.05 for MRF and ₹537.90 for Apollo Tyres. Over the past year, MRF's prices ranged from ₹115500.05 to ₹151445.00, with a yearly change of 31.12%. Apollo Tyres's prices fluctuated between ₹419.25 and ₹584.90, with a yearly change of 39.51%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.