United Breweries vs United Spirits Which Is a Better Investment?

United Breweries (UBL) and United Spirits are two major players in the alcoholic beverage industry in India. UBL is known for its flagship brand Kingfisher, while United Spirits is famous for brands like McDowell’s No.1 and Royal Challenge. Both companies have seen fluctuations in their stock prices due to factors like changing consumer preferences, government regulations, and economic conditions. Investors often compare the performance of UBL and United Spirits stocks to make informed decisions about their investments in the beverage sector.

United Breweries or United Spirits?

When comparing United Breweries and United Spirits, 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 United Breweries and United Spirits.

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. United Breweries has a dividend yield of 0.5%, while United Spirits has a dividend yield of 0.33%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. United Breweries reports a 5-year dividend growth of 30.26% year and a payout ratio of 0.00%. On the other hand, United Spirits 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 United Breweries P/E ratio at 111.52 and United Spirits's P/E ratio at 75.73. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. United Breweries P/B ratio is 12.46 while United Spirits's P/B ratio is 14.07.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, United Breweries has seen a 5-year revenue growth of 0.31%, while United Spirits's is 0.22%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with United Breweries's ROE at 11.38% and United Spirits's ROE at 26.30%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹1955.60 for United Breweries and ₹1482.35 for United Spirits. Over the past year, United Breweries's prices ranged from ₹1647.25 to ₹2204.90, with a yearly change of 33.85%. United Spirits's prices fluctuated between ₹1048.25 and ₹1648.40, with a yearly change of 57.25%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.