While the indices have seen a stellar rally over the last few quarters, thanks to heavyweight banking and IT stocks, there are some stocks that have fallen sharply from 52-week highs. These stocks may have been plagued by temporary factors like partial state wide curbs etc. However, they offer good dividend yields, long track record, virtually debt free and strong brand equity.
Bajaj Consumer Care
This stock has fallen from 52-week high levels of Rs 326 to the current market price of Rs 184. At the current market price the shares yields a strong dividend returns. For the year ending March 31, 2021, the company declared a dividend of Rs 10 per share, which translates into a dividend yield of more than 5.45%.
Bajaj Consumer Care owns the renowned Bajaj Almond Hair Oil and Bajaj Amla Hair Oil. The company recently launched a coconut oil as well. The company has small debt and ample cash and cash equivalents, making its balance sheet very strong. The equity too is very small and the management has a proven track record. The stock does have the potentially to rally from its near 52 week lows and could be a good bet for long term investors.
The stock of Bajaj Consumer was last trading at Rs 184 on the NSE.
Gulf Oil Lubricants
This stock has fallen to levels of Rs 502, which is close to its 52-week low of Rs 495. The Gulf Oil Lubricants stock had a 52-week high of Rs 827. For the Financial Year ending March 31, 2021, the company has declared a dividend of Rs 16 per share. This on the current share price of Rs 502, translates to a dividend yield of around 32.%.
The company is one of the top lubricants player and is amongst the fastest growing. Recently it launched oil lubricants for e-vehicles, thus preparing itself for the future as electric vehicle sales gather momentum.
The stock is trading at attractive valuations of less than 10 times one year forward p/e. With a strong brand equity, a fall in stock price and good dividend yields, the stock can be a good bet.
Avoid investing large amount of money
As far as the markets are concerned, they are over priced at these levels and hence it is good to look for stocks with a good management, have good dividend paying track record, have good cash on the books. Having said that there could be a potential downside risk as well.
We believe that the stock markets themselves are over priced at these levels and hence investors must stay cautious. Bajaj Consumer Care being a defensive stock from the FMCG space, could be a good hedge against any downside risk for the markets.
Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies and the author, are not liable for any losses caused as a result of decisions based on the article. We have been maintaining our cautious stance on the markets and continue to do so.