7 quality stocks with a low PE and a high ROCE to invest in 2021

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Importance of low PE and high ROCE in stocks

Return on Capital Employed (RoCE) is a measure that measures the operating profit (EBIT) generated by a business for every rupee of capital invested. One of the few profitability ratios that an investor uses to assess a company’s rate of return and profitability is the return on capital employed ratio. RoCE focuses on the total profitability of the business. A high RoCE indicates that the business is lucrative.

A stock with a low PE and strong trading fundamentals has a decent possibility of raising its price in the future. Sales, EPS, net worth, and other metrics grow faster when fundamentals are strong. Finally, the share price reflects this increase. Although, it is also not a good idea to choose stocks based solely on their “low PE”.

A high ROCE value suggests that more profits can be reinvested in the business for the benefit of shareholders. Capital is reinvested at a higher rate of return, resulting in increased growth in earnings per share. As a result, a high ROCE is indicative of a successful growth organization.

NMDC

NMDC

The stock returned 71.99% over a three-year period, compared to 44.96% for the Nifty 100 index. Over a three-year period, the stock returned 71.99%, while Nifty Metal provided investors with a yield of 49.84%. Over the past three years, the company has maintained a good ROCE of 25.69%. This is a good opportunity to buy because the stock is not overbought. Stocks have a high dividend yield.

NMDC founded in 1958, is a large cap mining company with a market capitalization of Rs 53,366.33 crore. In the most recent quarter, the company reported after-tax net profit of Rs 2,835.54 crore.

Hindustan Aeronautics

Hindustan Aeronautics

Hindustan Aeronautics Ltd., founded in 1963, is a large cap company in the defense sector with a market capitalization of Rs 34,652.58 crore. Over the past three years, the stock has returned 23.48%, while the S&P BSE Capital Goods Index has returned 35.69%.

Over the past three years, the company has maintained an ROE of 20.74%. Over the past three years, the company has maintained a respectable ROCE of 27.04%. With an interest coverage ratio of 11.93, the company is healthy.

The company reported gross sales of Rs. 214,383.8 crore and total income of Rs. 217,317.1 crore in the most recent quarter.

    Petronet LNG Ltd

Petronet LNG Ltd

On June 8, 2021, the company declared a dividend of Rs 3.5 per share, with a registration date of July 2, 2021. Petronet LNG Ltd. was founded in 1998 and is based in the UK. The current share price is 226. It currently has a market cap of Rs 33,900 crore. The company reported gross sales of Rs. 354,520 crore and total income of Rs. 358,245.7 crore in the most recent quarter.

Over the past three years, the company has posted good profit growth of 16.51%. The company’s debt was reduced by 632.20 crore.

Over the past three years, the company has maintained a respectable ROE of 23.59%. Over the past three years, the company has maintained a respectable ROCE of 30.82%.

Sun TV Network

Sun TV Network

Sun TV Network Ltd. was founded in 1985. The current share price is 536.3. It currently has a market cap of Rs 21,134.76 crore. The company reported gross sales of Rs. 34,044.2 crore and total income of Rs. 36,533.5 crore in the most recent quarter.

Over the past three years, the company has maintained a strong ROCE of 37.79%. Over the past five years, the company has maintained average effective operating margins of 68.10%. The company’s cash flow is well managed, with a CFO / PAT ratio of 1.28.

State of Gujarat Petronet Ltd

State of Gujarat Petronet Ltd

Gujarat State Petronet Ltd. started trading in 1998. Its share price is currently 335.25. It now has a market cap of Rs 18,915.19 crore. The company reported gross sales of Rs. 23,692.71 crore and total income of Rs. 24,334.25 crore in the most recent quarter.

Over the past three years, the company has posted good profit growth of 30.70%. The company has increased its sales by 32.10% over the past three years. The company’s debt was reduced by 735.67 crore.

Manappuram Finance SA

Manappuram Finance SA

Manappuram Finance Ltd. was founded in 1992. Its stock price is currently 162.65. It currently has a market cap of Rs 13,766.12 crore. The company reported gross sales of Rs. 43,113.03 crore and total income of Rs. 43,533.41 crore in the most recent quarter.

The profit margin increased by 5.41%. Over the past three years, the company has maintained a good ROA of 5.29%.

The company has a historical return on equity (ROE) of 21.43%. For the past three years, the company has maintained a respectable ROCE of 14.55%.

Chambal Fertilizers and Chemicals Ltd

Chambal Fertilizers and Chemicals Ltd

Over the past three years, the company has posted good profit growth of 42.28%. Equities have consistently outperformed bank FDs in terms of return on equity.

Over the past three years, the company has increased its turnover by 18.10%. Stocks also pay a lot of money in dividends. Over the past three years, the company has maintained a respectable ROE of 23.24%.

7 quality stocks with a low PE, a high ROCE to invest in 2021

7 quality stocks with a low PE and a high ROCE to invest in 2021

Company Name Price in Rs. PE ROCE
NMDC 184.45 8.61 22.54%
Hindustan Aeronautics 1024 10.62 24.34
Petronet LNG 226 11.56 32.16
Sun TV Network 532 13.73 31.1%
Gujarat State Petronet 335 11.8 38.5%
Manappuram FINANCE LTD 169 8.48 15.36
Chambal fertilizer 306 7.78% 29.2%
Warning

Warning

Financial ratios, on the other hand, provide information about past performance. You cannot predict whether the business will perform similar or better in the future based solely on past performance. The opinions and investment advice expressed by the authors or employees of Greynium Information Technologies should not be construed as investment advice to buy or sell stocks, gold, currencies or other products of based.

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