Stock To Buy: Debt Free Company With High Cash, Low P/E & Good Dividend Yields

As interest rates rise, one of the better stock to buy and own are debt free companies. This is because there are no worries over rising interest rates, which could dent the bottomline. One of the stocks that is good to buy at the current levels is SUN TV, which is debt free and is available at a reasonable price to earnings ratio.

SUN TV: A large player in the media space

The company is one of the top television Broadcasters in India, operates Satellite Television Channels across six languages of Tamil, Telugu, Kannada, Malayalam, Bangla and Marathi, airs FM radio stations across India and owns the SunRisers Hyderabad Cricket Franchise of the Indian Premier League and the Digital OTT Platform Sun NXT. The company is one of the few media companies where there is no debt on the books and also pays a good dividend. Apart from this, the financial performance of the company has been reasonably good over the last few years.

Decent financial performance

For the 4th quarter ending March 31, 2022, the company saw revenues for the quarter moving higher by by 6.52 % at Rs. 833.01 crores as against Rs.781.99 crores for the corresponding quarter ended March 31, 2021. The Subscription revenues for the quarter was at Rs.416.03 crores as against Rs.428.12 crores for the corresponding quarter ended March 31, 2021. EBITDA for the quarter ended March 31, 2021 was at Rs.553.33 crores as against Rs. 546.79 crores for the previous quarter ended March 31, 2021. The Profit after taxes for the current quarter stood at Rs.404.35 crores as against Rs. 449.88 crs in the corresponding quarter ended 31st March, 2021. Overall, the company reported good quarterly numbers. For the full year ending March 31, 2022 the Profit after taxes rose by 8.18 % to Rs.1,644.80 crores for the year ended 31st March, 2022 as against Rs. 1,520.41 crores for the previous year ended 31st March, 2021.

Why to buy the stock of Sun TV?

There are many reasons to buy the stock of SUN TV. To begin with the stock has fallen from levels of Rs 612 to levels of Rs 433. After the significant fall in the price, the stock has become attractive to buy. Apart from this, the company reported an EPS of Rs 41.6, which means the stock is trading around that 10 times price to earnings multiples. This is extremely reasonable for a company that is debt free and has a solid presence in broadcasting. Apart from this, the company declares a good dividends, taking the yields on the stock itself to 3.18%. Overall, we believe that as the economy recovers, we would see media companies doing well. And, one of the stocks that is a good buy at the current market price of Rs 431 is Sun TV.

Disclaimer

Investing in stocks is risky. Neither the author, nor Greynium Information Technologies Pvt Ltd, should be held responsible for losses incurred based on the decision in the article. Markets have turned extremely volatile and hence caution is advised before investing. The author and his family on the date of writing, do not own shares in SUN TV.