5 stocks with zero debt, high alpha to invest in
Premium- Multibagger stocks: Debt-free status is usually a positive trait for any company whereas alpha measures how much a stock has outperformed the respective benchmark
Multibagger stocks: Despite global economy feeling the uncertainty over heat of Covid-19 pandemic, some stocks have managed to give stellar return to the investors who believe in holding a stock as long as one can. But, going further deep in last 5 years, one would realise that money is not in buying and selling but in hold as it enables a stock market investor to beat the key benchmark return by huge margin. However, one must remember that the long-term investment strategy holds well for quality stocks with zero debt and high alpha.
Religare Broking lists out 5 stocks where the companies have zero debt (as on FY21) but have generated higher returns (Alpha) than the benchmark in last 5 years:
1] Divi's Laboratories: This NSE listed pharma stock has delivered multibagger return to its investors in last 5 years beating NSE Nifty return in this period by a huge margin. In last 5 years, NSE Nifty has delivered around 107 per cent return whereas Divi's Laboratories Ltd share price surged from around ₹1160 to ₹4,751 per share levels, logging around 309 per cent surge in this period. So, the zero debt company generated around 200 per cent more return than NSE Nifty in last 5 years.
2] Infosys: In last five years, this IT stock has risen from around ₹495 to ₹1,738 per share levels, rising to the tune of near 251 per cent. This IT company is also a zero debt company in last 5 years and it has generate around 144 per cent higher return than the return given by 50-stock index Nifty.
3] Tata Consultancy Services or TCS: This is another large-cap IT company stock with zero debt and high alpha feature. In last 5 years, TCS share price has risen from around ₹1100 to ₹3641 on NSE, yielding near 231 per cent return to its shareholders in this period beating Nifty by around 124 per cent.
4] Indraprastha Gas Limited or IGL: This oil and gas stock has surged from ₹173.69 to ₹505.50 per share levels in last 5 years, delivering to the tune of 191 per cent return to its shareholders. So, this debt-free company stock has generated 84 per cent higher return than the Nifty 50 return of 107 per cent in this period.
5] Hindustan Unilever Ltd or HUL: This consumer goods company has risen from near ₹817 to ₹2348.50 apiece levels in last 5 years, giving around 178 per cent return to its shareholders, which is 71 per cent higher from Nifty 50 index return in the same period. This company is also a debt-free company that has generated more return than the benchmark index.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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