Mazagon Dock Vs Cochin Shipyard: Stock Splits, Bonus Issues, Dividends; Which Zero Defence PSU Stock To BUY?

Amidst the stars of the defence PSU basket namely BEL, HAL and Bharat Dynamics, two stocks have risen sharply and significantly by 70-230% in 2024 so far. These two defence giants are debt-free and have stable returns on equity. They're also among the leading shipyard stocks backed by the government. They are Cochin Shipyard and Mazagon Dock Shipbuilders.

Cochin Shipyard:

Share Price: The stock price ended at Rs 2132.15 apiece, down by 4.5% on BSE after market hours of June 21. The company's market cap is at Rs 56,092.77 crore, Its 52-week high and low is at Rs 2,427.75 apiece and Rs 277.55 apiece. Currently, Cochin is up by over 668% from its 1-year lows. YTD, the stock is up by 212.85% on BSE, making it the top-performing stock of 2024.

Dividend: In 2024, Cochin paid dividends of up to Rs 3.50 per share or 70% for which it turned ex-dividend in February month. In FY24, overall, the company delivered dividends of 195% valuing Rs 9.75 apiece. Since August 2018, Cochin has delivered up to 15 dividends.

Bonus Issue: The company has not yet distributed any bonus shares.

Stock Split: At the start of 2024, Cochin split for the first time in the ratio of 2:1. The ex-split date was January 10, 2024.

Fundamentals: As per Trendlyne data, Cochin's share surged by 629.47% and outperformed its sector by 496.74% in the past year. While its Price to price-to-earning ratio is 71.6, higher than its sector PE ratio of 38.63. Further, the Return on Equity(ROE) for the last financial year was 15.65%, in the normal range of 10% to 20%. Also, Mutual Fund Holding increased by 0.26% in the last quarter to 2.13, and Promoter Pledges are zero. Notably, Debt to Equity Ratio of 0 is less than 1 and healthy. This implies that its assets are financed mainly through equity.

BUY/SELL: As per Trendlyne data, the consensus recommendation from 4 analysts for Cochin Shipyard Ltd. is HOLD. Although, Antique Stock Broking also recommended HOLD on Cochin share price, however, it trimmed its target price to Rs 890.

Cochin Shipyard was incorporated in the year 1972 as a fully owned Govt of India company. In the last three decades, the company has emerged as a forerunner in the Indian Shipbuilding & Ship repair industry.

Mazagon Dock Shipbuilders:

Share Price: Mazagon Dock's share price ended at Rs 3894.30 apiece on June 21, down by 2.33% on BSE with a market cap of Rs 78,544.14 crore. The stock's 52-week high and low is at Rs 4,249.95 and Rs 1,162.00 apiece respectively. YTD, the stock is up by 70.5%.

Dividend: In FY24, the company distributed dividends of 274.50% worth Rs 27.45 per share. Since February 2021, the company delivered up to 7 dividends.

Stock Split: Mazagon Dock has never split in its history so far.

Bonus Issue: Also, the company has not paid bonus shares yet.

Fundamentals: Data from Trendlyne revealed that Mazagon stock rose 216.64% and outperformed its sector by 73.06% in the past year. Meanwhile, the Price to Earning Ratio is 40.55, lower than its sector PE ratio of 73.63. Additionally, the Return on Equity(ROE) for the last financial year was 31.02%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit. Mutual funds also have taken a liking to Mazagon stock, as their holding increased by 0.11% in the last quarter to 0.48. Lastly, the Debt to Equity Ratio is zero as the company is debt-free, and that of promoter pledges is zero too.

BUY/SELL: As per Trendlyne data, the consensus recommendation from 2 analysts for Mazagon Dock Shipbuilders Ltd. is HOLD. On the other hand, Antique maintained BUY's recommendation on the stock but has lowered its target price to Rs 3,548.

It was incorporated as a Private Limited Company in 1934. After its takeover by the Government in 1960, Mazagon Dock grew rapidly to become the premier war-shipbuilding yard in India, producing warships for the Navy and offshore structures for the Bombay High.

Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.