6 Stocks To Buy And Hold For The Next 3-5 Years

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Benchmark Indian indices have lost heavy ground in the last 1 year, eroding nearly 22 per cent from the highs of March 2015. In fact, the markets have gone nowhere in the last 21 months that the Narendra Modi government has been in charge, after a euphoric run in 2014.

Here are 6 stocks that you can buy and hold, if you have the patience to hold for at least 3-5 years.

Great Prospects Ahead

Sun TV has recently decided to tie up with several Over The Top companies. This will help Sun to monetize content.

The company has a solid market share in Tamil Nadu with a virtual monopoly, and good market shares across Karnataka, Andhra, Telangana and Kerala.

The company is likely to be a big beneficiary of the digitization process. With a dividend yield of near 5 per cent, the stock is a great pick as the p/e is just about 13 times, one year forward earnings.

High on dividend yield

Coal India is a virtual monopoly business, that is cash rich and debt free. The company has aggressive plans to boost production.

The one good thing is that the dividend yield on the stock is nearly 6 per cent. We believe that the stock has a superb long term potential, making it an interesting pick, if it falls below Rs 300.

Great revenue visibility

Ahluwalia Contacts has major orders from leading private and public enterprises, including orders from hospitals, the police department and banks.

In fact, the order book is close to Rs 38 billion. The company has managed to reduce its debt this year, which is good, as the business can be highly leveraged. With an expected EPS of Rs 20 for 2016-17, the stock is not expensive at Rs 220.

A better performer in difficult environment

Karnataka is among the few banks, that has not seen its net asset quality deteriorate significantly in the last quarter, as compared to other banks which have been woeful. 

The gross NPA moved from 3.18 to 3.56, which is nominal when one considers other players in the business.

What is interesting is that the company pays a dividend of Rs 5 per share, which translates into a dividend yield of almost 5.55 per cent on the current market price of Rs 90.

A new addition to the Nifty

Tata Motors Differential Voting Rights has recently been added to the Nifty.

This is likely to see the gap between the DVR and the underlying shares reducing significantly. The shares are quoted at Rs 318, while the DVRs are available at just Rs 246.

DVR shares are also entitled to 5% extra dividend. The stock of Tata Motors itself is under valued at just 7 times one year forward earnings. With aggressive plans at the company, the DVR has the potential of doubling in the next few years.

Highly undervalued

Shares in Jammu and Kashmir Bank have fallen from Rs 128 to a new 52-week low of Rs 65.

The stock is trading at a p/e of just 5.5 times, while the price to book value is just 0.5 times. It is cheap on every count, with a dividend yield of 3.4 per cent. A great stock to buy and hold.

Disclaimer: This article is strictly for informational purposes only. It is not a solicitation to buy, sell in equity shares mentioned. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author of this article do not accept culpability for losses and/or damages arising based on information in this article. 

Read more about: sun tv, coal india, karnataka bank
Story first published: Wednesday, February 24, 2016, 8:50 [IST]
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