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Long-Term Stock To Buy: Good On Dividend Yields, Strong Balance Sheet And P/E Of Just 8

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In this market it's hard to find stocks that are available at a low p/e, especially if they have had a good track record, a good consistent dividend paying record and a sound management in place.

 

Jindal Saw: A good track record

Jindal Saw: A good track record

Jindal Saw is one of the top players in SAW pipes, ductile iron pipes and fittings, carbon, alloy, stainless steel pipes and tubes, pellets etc. It has a long-standing track record of paying consistent dividends and good track records of profitability.

In July last year, the stock hit a 52-week high of Rs 147 and is now trading at Rs 117. The company should be back on track, following lesser and lesser implications of Covid in the coming quarters.

Good quarterly numbers
 

Good quarterly numbers

The company reported good quarterly numbers for the Sept 2021 quarter. Total income during the period came in at Rs 3004 crores as against Rs 2446 crores in the corresponding period of the previous year. The net profits for the Sept 30, 2021 quarter was placed at Rs 178 crores. The company has over the quarters consistently delivered on profitability.

With the economy back on track, demand for pipes, especially SAW pipes is likely to surge. SAW pipes find application in a host of areas including oil and gas and water sector. Jindal saw is the market leader in its segment in India and has supplied pipes for major pipeline projects in the Middle East, North America, Latin America, Africa, Europe, Australia, CIS and Asia.

Valuations and view

Valuations and view

The company reported an EPS of Rs 3.78 for the quarter ending Sept 30, 2021. We do not see a significant drift in earnings for the company in the coming quarters. This would make the EPS around 15 and slightly more for the coming year. This means the stock, which is trading at around the Rs 117 mark is available at a p/e of just about 8. This is not expensive at all. Over the last 5 years the company has strived to reduce its det, which has now fallen over the years.

The dividend yield is also now close to the 2% mark. Overall, the stock is available at reasonable p/e multiples, given that the indices itself are trading at p/e of 21 times. Buy the stock of Jindal Saw if you are a long term investor.

Disclaimer

Disclaimer

Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article. The author and is family do not hold shares in the above company viz: Jindal Saw Ltd.

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