2 Safe Stocks To Buy For Good Dividends & Strong Outlook

It's been a harrowing time for investors in the last 2-weeks as geo-political tensions mount and crude oil prices surge. Here are 2 stocks that are relatively and pretty much insulated from the tensions right now and are good for dividends.

Oracle Financial Services

This is a stock, which based on the current market price of Rs 3,340 offers a dividend yield of almost 6%. The company is an IT company that is engaged in software services for the Banking and insurance sector. It is unlikely to be impacted in anyway by global developments and in fact could be one of the beneficiaries of a falling rupee.

The stock is trading at a price to earnings ratio of just 17 times trailing EPS, which is cheap for a multinational company that is majority owned by Oracle Corp. In fact, the latter is among the biggest IT companies in the world.

We believe that the stock with its strong dividend every year of nearly Rs 200 per share and reasonable price to earnings offers good potential for an upside. In fact, the stock has fallen from 52 week high levels of Rs 5000 plus to Rs 3300, making it cheaper by 30 to 25%.

The stock is now available very close to its 52-week low, while most other IT stocks have remained rather resilient to the recent fall in the markets.

Buy Marico Industries

Broking firm Sharekhan has recommended buying the stock of Marico Industries at the current market price. In fact, the company being an FMCG stocks is immune to an extent from global chaos.

"In the current commodity inflationary environment, Marico is better placed compared to other FMCG companies due to consistent fall in the copra prices since its high of Rs. 140 per kg (Calicut copra) in February 2021 to around Rs. 90-95 per kg in the recent times. Vegetable oil prices (including Kardi oil and Rice bran oil) reached its peak and saw some weakness in the month of January 2022. Gross margins and OPM are expected to improve sequentially and will trend higher on y-o-y basis in FY2023. The company has undertaken timely price intervention in Parachute and Saffola edible oil brand to improve sales volume in the coming quarters. The company has guided for mid-teens revenue growth with volume growth of 8-10% in the medium term," Sharekhan has said in its latest report.

"We maintain our Buy recommendation on Marico with unchanged price target of Rs. 645. Better margin visibility, strong medium term growth prospects and decent valuations at 36x its FY2024E earnings makes it a good pick in the FMCG space," the brokerage has said.

Disclaimer

The stock of Marico Industries has been picked from the brokerage report of Sharekhan. 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 owns shares in Oracle Financial Services as on the date of writing this article.