2 Quality Long-term Stocks To Buy With Low P/E & High Dividend Yields

After a very tumultuous week, markets are showing some signs of stabilizing. However, in the difficult situation it would be good to buy into some high quality stocks that offer good dividends and are available at a low p/e. Here are 2 such stocks.

Kalyani Steels

Kalyani Steels is one of the top manufacturers of special carbon and alloy steels engineering and alloy steel ingots blooms and billets. The company has been consistently paying a good dividend. In fact, over the years it also had a consistent financial performance. For the quarter ending Dec 31, 2021 the company reported a net profit of Rs 427.81 million. Overall, for the nine months ending Dec 31, 2021, the company has reported an EPS of rs 40, which means for the full year it could do an EPS of Rs 50 or thereabouts.

At the current market price of Rs 295, the stock barely trades at a p/e of 6 times. The dividend yield on the stock is 2.54%.

Why to buy the stock of Kalyani Steels?

We believe based on the above parameters the stock of Kalyani Steels is very cheap. In fact, with economic recovery gathering momentum and commodity prices rising, the company could be one of the big beneficiaries.

The price to book value of the stock is also just about 1.1 times. The shares of Kalyani Steels are now very close to its 52-week low of Rs 280. All of the above factors make the shares of the company attractive to buy at the current levels.

We believe that investors can ignore the market volatility and buy into stocks like Kalyani Steels in small amounts to add to their portfolio.

Mazgaon Dock and Shipbuilders

This is a stock that is clearly undervalued and has the potential to give good dividend yield and returns to shareholders.

Mazagon Dock Shipbuilders is one of India's leading Defence public sector undertaking shipyard under the Ministry of Defence. As such the company is a Government of India majority owned entity.

The company undertakes construction of warships & submarines with facilities situated at Mumbai and Nhava (under development). The company has the capability to build warships, submarines, merchant ships upto 40,000 DWT.

Over the past few years, the government has been increasing the defense outlay and with the emphasis increasingly shifting to Make in India in defense as well.

The stock is a good buy with a p/e of just 2 times and dividend yield of nearly 3%. The stock is also cheap at a price to book of 1.77 times. Along with fundamentals, the company has a good monopoly kind of business, which makes the stock attractive to buy for long-term investors.

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article. The author and has family do not own any stocks mentioned above.