It is always a great idea to buy stocks that are not only debt free, but, also have solid cash flows. These stocks also tend to provide great dividends, but, since the prices are high for such stocks, their dividend yields may not always be the best. Take a look at a few stocks that are debt free and can be good investment bets.
NMDC is another debt free company that is worthy of investment. The company is a government of India owned company that is into iron ore mining. NMDC is a cash rich company. The stock gives a dividend yield of as much as 7 per cent at the current market price. If you are looking to buy a virtually monopoly business, with a strong cash flow and debt free status, NMDC is a good bet. The shares of the company have recently dropped from levels of Rs 140 to Rs 122. This also is one more reason why it good be a good pick. Iron prices are on the rise and this is good news for NMDC, which is the largest iron ore producer in the country.
This is the number one anti virus software company in India, in terms of market share. The company also is a debt free company. Over the years, Quickheal has established itself as a top player in the desktop and mobile antivirus category. Now, look at some statistics that make Quickheal Technologies a company that can deliver returns.
India is the third top destination for cyber attacks. In 2015 , 403 million pieces of malware have been reported. Over half a billion personal records were stolen from small and medium enterprises. In 2014, there were 21 new families of mobile banking trojan and 803 android malware families. The rapid growth of the internet and rising incidence of malware, spyware and other viruses, make Quickheal an interesting play.
While the last two quarters of the company have not been exceptional. In FY 2016-17, the company reported an EPS of close to Rs 8, but had problems with the demo effect. We believe that the company can still report an EPS of around Rs 15 in FY 2017-18. This should take the stock closer to levels of Rs 300 from the current levels of Rs 210. The promoter holding in the company is also very high with a stake of as much as 72 per cent. The company is presently available with a dividend of Rs 2.5 per share, which further reduces the cost of buying.
A good stock to buy from a long term perspective. Check stock quote of Quickheal Technologies here
Sun TV is the leading player of satellite television in the south and owns a range of "Sun TV" channels in different South Indian languages. This is again a debt free company with a very high dividend payment.
Sun TV is likely to be one of the biggest beneficiaries of the digitization drive initiated by the government of India. The promoters have also been acquitted by the Supreme Court, which is another positive for the company.
A good buy
The company has a strong position in the south and dominates certain markets. We believe that the company can report an EPS of Rs 40 for 2017-18, which makes the stock a little expensive at the current market price of Rs 826.
If you get the stock at around the Rs 800 levels, it would be a good time to buy into the stock. Again, like Quickheal Technologies, the promoters of the company have a very high holding in the stock. A good debt free company to own.
Coal India is not only a debt free company, but is also a cash rich company. The best part of investing in the company is that you get solid dividends.
In fact, the stock has recently fallen to 52-week lows of Rs 238 and at the current market price the dividend yield itself is a healthy 8 per cent. Buy Coal India for the long term for good yields. We are assuming that the company will declare a dividend of at least Rs 20 per share in 2017-18. If that happens and you get the stock at the Rs 250 levels, your dividend yield would be 8 per cent. Remember, this is tax free dividend as well. However, we anticipate that the company would lower the dividends this year, due to falling cold prices.
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