Muthoot Finance vs Manappuram Finance Which Should You Buy?

Muthoot Finance and Manappuram Finance are two major players in the gold loan industry in India. Both companies are known for their strong presence in the market and have been consistently delivering solid financial performance. While Muthoot Finance has a larger market share and a longer track record, Manappuram Finance has been rapidly expanding its operations and gaining market traction. Investors looking to invest in the gold loan sector should consider the strengths and growth potential of both companies before making a decision.

Muthoot Finance or Manappuram Finance?

When comparing Muthoot Finance and Manappuram Finance, 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 Muthoot Finance and Manappuram Finance.

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. Muthoot Finance has a dividend yield of 1.15%, while Manappuram Finance has a dividend yield of 2.14%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Muthoot Finance reports a 5-year dividend growth of 17.08% year and a payout ratio of 0.00%. On the other hand, Manappuram Finance reports a 5-year dividend growth of 8.45% 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 Muthoot Finance P/E ratio at 17.96 and Manappuram Finance's P/E ratio at 6.82. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Muthoot Finance P/B ratio is 3.16 while Manappuram Finance's P/B ratio is 1.23.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Muthoot Finance has seen a 5-year revenue growth of 0.84%, while Manappuram Finance's is 0.91%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Muthoot Finance's ROE at 18.53% and Manappuram Finance's ROE at 19.54%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹2055.05 for Muthoot Finance and ₹171.85 for Manappuram Finance. Over the past year, Muthoot Finance's prices ranged from ₹1261.90 to ₹2132.90, with a yearly change of 69.02%. Manappuram Finance's prices fluctuated between ₹138.35 and ₹230.40, with a yearly change of 66.53%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.