SBI vs Yes Bank Which Is More Favorable?

SBI and Yes Bank are two major players in the Indian banking sector, each with its own strengths and weaknesses. State Bank of India (SBI) is the country's largest public sector bank, known for its stability and extensive reach. However, Yes Bank, a private sector bank, has been facing challenges in recent years due to financial mismanagement. Investors looking to invest in banking stocks must carefully analyze the financial health and performance of both SBI and Yes Bank before making any decisions.

SBI or Yes Bank?

When comparing SBI and Yes 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 Yes 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 4.18%, while Yes Bank has a dividend yield of -%. 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, Yes 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 13.99 and Yes Bank's P/E ratio at 38.35. 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 0.93 while Yes Bank's P/B ratio is 1.48.

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 Yes Bank's is -0.24%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SBI's ROE at 7.09% and Yes Bank's ROE at 4.07%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $25.59 for SBI and ₹21.46 for Yes Bank. Over the past year, SBI's prices ranged from $19.00 to $27.02, with a yearly change of 42.21%. Yes Bank's prices fluctuated between ₹19.02 and ₹32.85, with a yearly change of 72.71%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.