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2 Long-term Stocks To Buy With Low Valuations, Strong Dividends & Good Track Record

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With the markets back near that 60,000 points on the Sensex, it's always hard to recommend stocks. One has to dig deep to find value in this market, as the indices seem over valued at this point in time. However, liquidity which is the final king, tends to propel stocks even higher. Here are a few stocks that you can buy and add to your portfolio.

 

Buy Bajaj Auto stock for a dividend yield of a solid 4.25%

Buy Bajaj Auto stock for a dividend yield of a solid 4.25%

We like the stock of Bajaj Auto for a number of reasons. The stock is offering a dividend yield of more than 4.25%. The company has a spate of launches scheduled and its exports are likely to pick up. Apart from this, the company as on 30 September 2021, after payment of dividend of Rs 4,051 crore, had surplus cash and cash equivalents at Rs 17,526 crore as against Rs 17,689 crore as on 31 March 2021.

Not only this, the company is now gaining in market share, which is a good sign in a competitive market. Bajaj Auto Motorcycles sold nearly 828,000 units in the domestic market in the first half of 2021-22, which is a share of 19.1%, as against 18.2% in the first half of 2020-21.

Bajaj Auto: Valuations and view
 

Bajaj Auto: Valuations and view

The stock of Bajaj Auto has dipped from levels of Rs 4361 to the current levels of Rs 3294, which is a sharp knock. At these levels, the stock is trading at a p/e of just 13 times one year forward earnings. We believe that the stock is pretty much undervalued after the fall. With a dividend yield of more than 4%, strong cash flows, a fall from 52 week highs and a growing market share, the stock has the potential to rally. Bajaj Auto remains a good pick from the Nifty space.

HeroMoto Corp

HeroMoto Corp

This is another stock that we are recommending from the two-wheeler space for long-term investors. Again, one of the reasons to recommend the stock is the sharp 33% fall in the stock from 52-week highs. The shares have fallen from levels of Rs 3600 to Rs 2484. The stock is now not too far away from its 52-week low.

The shares at the current market price are trading at around 14 times one year forward earnings, Again, like Bajaj Auto the company remains strong on dividend yields, with dividend yield of more than 4%. The stock is trading at a p/e of 15 times one year forward earnings.

The company like Bajaj Auto is a debt free company with strong cash on the books. After the sharp fall in the stock price over the last couple of quarters it make sense to look at some of these two wheeler stocks. The only problem right now we have to recommend stocks is the stretched valuations in the markets. However, for long term investors the stocks of Bajaj Auto and Hero Moto Corp maybe good bets.

Disclaimer

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.

Jyothy Labs

Jyothy Labs

This is another stock that we like for long-term investment. The shares have fallen to a near 52-week low of Rs 142. The company has one of the finest names in the FMCG sector including Henko, Mr. White, Ujala, Pril etc. Over the last few months we have seen the share price of the company stuck in a tight range without any break out. However, analysts are expecting that the performance for a few more quarters could be lacklustre.

Having said that one must not forget that raw material prices have been falling, which should lead to good few quarters going ahead. The stock of Jyothy Labs is a good stock to buy for long term value.

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