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Top 5 Banking Stocks to Buy in 2022

Top 5 Banking Stocks to Buy in 2022
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Banking is considered the backbone of any economy. The growth of the economy has to go through the banking sector. Here we have the top 5 banking stocks to look for in the year 2022.

Top 5 Banking Stocks

1. HDFC Bank

  • Market Cap – Rs 8,01,000 Cr
  • Stock PE – 20
  • ROCE – 5.83%
  • Dividend Yield – 1.08%
  • Market Price – Rs 1439

Ranking at number one the largest bank in the nation is HDFC Bank. Not only in the banking sector but it is one o the largest companies in the entire Stock Market. Trading at Price to Earning Ratio of 20, the bank has a market Capitalization of 8 Lakh Crores. It is giving a Return on Equity of 16.5% and a Return on total capital employed of 5.83%. There is a dividend of more than 1 percent. The bank has a 17% compounded growth in revenue and a 22% compounding in its profits. It has been a consistent performer with a 17% CAGR Return in last 10 years.

2. ICICI Bank

  • Market Cap – Rs 5,95,000 Cr
  • Stock PE – 21
  • ROCE -5.59 %
  • Dividend Yield – 0.58%
  • Market Price – Rs 855

At number two, ICICI bank is no exception to being considered as the best bank in the country. With a market cap of almost 6 Lakh Crores, trading at a PE of 21, ICICI Bank is giving an ROE of 14% and ROCE of 5.6%. A 10% consistent compounding in terms of sales and a 13% compounded growth in profits make it a strong participant. The bank has given a solid 18% Compounded return when we look at the numbers for the past 10 years.

3. State Bank of India

  • Market Cap – Rs 4,59,000 Cr
  • Stock PE – 11
  • ROCE – 4.44%
  • Dividend Yield – 1.38%
  • Market Price – Rs 514

State Bank of India is the bank where most middle-class Indians have their bank accounts. It is the back of common people. But when it comes to performance in the stock market, the bank has given a CAGR of 11% for the last 10 years. With a 4.44% Return on Capital Employed and a 12.25 Return on Equity, the State Bank of India is trading at a PE Ratio of 11 and has a total market cap of 460,000 crores. The dividend yield given by the bank is also more than 1 percent.

4. Kotak Mahindra Bank

  • Market Cap – Rs 3,67,000 Cr
  • Stock PE – 28
  • ROCE -6.29 %
  • Dividend Yield – 0.06%
  • Market Price – Rs 1850

Kotak Mahindra Bank has been considered one of the most innovative banks in the past few years and it is the third largest private sector bank in the country. The bank has been growing its revenue at a compounded growth rate of 15% and the profits are growing at a faster compounding of 225. And, justifying this growth, the investors have also grown their money at an annual growth rate of 20% for the last 10 years. Again, there is a price for the premiums in terms of the PE ratio being 28. The bank has an ROE of 13.3% and a ROCE of more than 6%.

5. Axis Bank

  • Market Cap – Rs 2,24,000 Cr
  • Stock PE – 14
  • ROCE – 5.15%
  • Dividend Yield – 0.14%
  • Market Price – Rs 728

Last but not least on the list is Axis Bank which is also growing quite rapidly. Axis Bank has a market cap of 224,000 crores and is trading at a PE ratio of 13.9. Currently, the market price for the bank is 728. An ROE of 12.7 and a Return on total capital employed of 5% make it at par with other banks on the list. The sales growth and Profit growth for Axis Bank have been 12% and 13% respectively for the last 10 years. It has given a 14% Compounded Annual Growth Rate to its investors in the past 10 years.

Some other popular banking companies to look at are:

  1. Indusind Bank
  2. Bank of Baroda
  3. IDBI Bank
  4. Bandhan Bank
  5. Canara Bank
  6. IDFC First Bank
  7. RBL Bank
  8. Federal Bank, etc.
S.No. Name CMP Rs. P/E Mar Cap Rs.Cr.  Div Yld % NP Qtr Rs.Cr. Qtr Profit Var % Sales Qtr Rs.Cr. Qtr Sales Var % ROCE %
1. HDFC Bank 1439.40 20.18 801533.15 1.08 9579.11 20.92 37273.81 15.56 5.83
2. ICICI Bank 855.85 21.48 595817.93 0.58 7384.53 55.05 26158.60 15.67 5.59
3. St Bk of India 514.85 11.34 459483.63 1.38 7325.11 -0.74 76780.86 11.34 4.44
4. Kotak Mah. Bank 1850.00 28.18 367478.94 0.06 2755.39 52.56 9164.28 13.94 6.29
5. Axis Bank 728.70 13.88 224014.65 0.14 4380.59 85.86 19193.33 17.74 5.15
6. IndusInd Bank 1059.20 15.69 82206.55 0.80 1603.29 64.45 8181.77 8.01 5.95
7. Bank of Baroda 126.30 7.59 65288.86 2.26 1943.90 63.65 19984.39 10.87 4.02
8. IDBI Bank 45.10 17.93 48493.33 0.00 768.59 28.50 4645.49 -5.59 4.07
9. Bandhan Bank 275.20 69.31 44306.39 0.36 886.50 137.62 4055.36 18.93 4.30
10. Canara Bank 235.00 5.42 42640.96 2.77 2179.77 83.07 18536.89 8.61 4.49

So, these are the top 5 banking stocks that you can consider.