For simplicity below are the key attributes of bluechip stocks and as these sustain even during volatile and highly uncertain markets, below are some of the attractive bluechips considering their financials and return ratios.
Attributes of bluechip stocks
Shares of very large and recognized entities with a proven long track record of healthy financial performance
These stocks have capabilities to offer good returns during the bull phase and also can endure tough market conditions.
These most likely being market leaders in their respective industries are highly priced.
Why debt to equity and RoE are chosen as a criteria here for determining the attractiveness of bluechip stocks?
As is very clear we are in a rising interest rate regime now, given the inflationary threat and to explain it, inflation being at multi-year high shall be controlled and brought to comfortable levels by reducing the demand and this shall be done by hiking interest rates. So, in such a case, listed companies with nil debt or virtually debt free stand out as their interest expense is lower in comparison, so more profitable down the line.
Ideally Debt to equity ratio while choosing a stock to buy should be less than 1 and preferably less than 0.5 or zero
Also, RoE or Return on equity i.e. another integral financial ratio to determine whether the stock is fundamentally strong or not should be greater than 15% (last 3 years average). RoE is typically an expression in percentage terms of a company's net income as its returned as a value to its shareholders.
The formula or the ratio calculates the efficiency with which a company generates profit using the funds that shareholders have invested.
8 Attractive Bluechips With Debt To Equity Up To 0.75 And RoE Of Over 20%
|CompanySector | Industry||Price(₹)||52 Week Low||52 Week High||Debt to Equity||Return on Equity 5Y Avg(%)|
|Alkyl Amines Chemicals Ltd.Chemicals | Organic Chemicals||3,027.95||2,768.90||4,749.00||0.06||32.83|
|APL Apollo Tubes Ltd.Metals & Mining | Steel Tubes & Pipes||888.65||592.50||1,114.55||0.31||22.02|
|Balkrishna Industries Ltd.Automobile | Tyres & Tubes||2,050.45||1,743.00||2,724.40||0.17||20.19|
|Chambal Fertilisers & Chemicals Ltd.Chemicals | Nitrogenous Fertilizer.||384.85||270.35||516.00||0.75||26.28|
|Coromandel International Ltd.Chemicals | Other Fertilisers||889.55||709.35||1,002.50||0.00||24.04|
|KPR Mills Ltd.Textiles | Cotton & Blended Yarn||559.55||-280.68||771.8||0.28||21.87|
|Petronet LNG Ltd.Energy | Natural Gas Utilities||209.95||190.25||252.2||0.01||23.64|
|Sanofi India Ltd.Healthcare | Drugs & Pharma||6,602.80||6,351.00||9,300.00||0.00||23.83|
The above 2 parameters surely help you refine your search for good attractive bluechip stocks to buy now. Nevertheless, do your thorough analysis and then only bet on these highly risky market linked securities as the markets are highly choppy at the current juncture.