SBI vs Canara Bank Which Is More Favorable?

State Bank of India (SBI) and Canara Bank are two prominent Indian banks with a significant presence in the country's financial sector. Both banks are listed on the stock exchange, offering investors an opportunity to gain exposure to the banking industry. While SBI is the largest bank in India in terms of assets, Canara Bank is also a formidable player in the industry. Investors interested in banking stocks may consider comparing the performance of SBI versus Canara Bank to make informed investment decisions.

SBI or Canara Bank?

When comparing SBI and Canara 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 SBI and Canara 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. SBI has a dividend yield of 4.03%, while Canara Bank has a dividend yield of 3.02%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. SBI reports a 5-year dividend growth of -44.26% year and a payout ratio of 56.44%. On the other hand, Canara 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 SBI P/E ratio at 14.70 and Canara Bank's P/E ratio at 6.04. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. SBI P/B ratio is 0.98 while Canara Bank's P/B ratio is 0.94.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, SBI has seen a 5-year revenue growth of 1.88%, while Canara Bank's is 1.64%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SBI's ROE at 7.09% and Canara Bank's ROE at 16.75%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $26.50 for SBI and ₹104.00 for Canara Bank. Over the past year, SBI's prices ranged from $19.00 to $27.02, with a yearly change of 42.21%. Canara Bank's prices fluctuated between ₹82.69 and ₹128.90, with a yearly change of 55.88%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.