Month: July 2021

Buy Coal India stock for dividend yields of more than 8%

This stock has been giving solid dividends for many years now. In the FY 2020-21 the board declared a dividend of Rs 12.5 per share in total, including interim dividend. If you buy the shares at the current market price of around Rs 144, the yield is around 8.6%, which is superb. We believe at least for the next few years, the dividend would continue to remain strong as the fiscal deficit looms on the government and it pushes public sector units to declare higher dividends.

We foresee good demand for Coal in the country, and the company is also cash rich and debt free. Having said that do not expect the stock to perform dramatically well from these levels, though some brokerages have set a higher price target of Rs 180 on the stock. If that happens investors would get capital appreciation we well. However, we do not want to predict stock movement at the moment, though we believe that risks are on the lower side are limited on account of the dividend yield on the stock.

Rural Electrification Corporation

The company is a majority government owned company, that is into infrastructure funding. For three consecutive years, 2018-19, 2019-20 and 2020-21, REC has declared a dividend of 11 per share. If you take into account the current market price of Rs 153, the stock is available at a dividend yield of 7.13%.

Again, it is important to predict the dividend yield on the stock, so investors do not buy the stock and get stuck with lower dividends. We believe there is no reason for the Rural Electrification Corporation not to maintain or enhance the dividends in the years to come.

In fact, for FY 2020-21, Rural Electrification Corporation recorded its highest ever yearly net profit at Rs 8,362 crores. Sanctions stood at Rs 1,54,821 crore as against Rs 1,10,908 crore, up 40% and the net profits were up a staggering 71%.

Apart from the dividend factor, REC is also good a stock to buy from a fundamental point of view. Shares in REC were last trading at Rs 152.80 on the NSE.

Power Finance Corporation

Power Finance Corporation, is another stock that is relatively safe and the downside risks are low. Again, like the two stocks mentioned above, this too is a government of Indian owned entity.

In FY 2019-20, the company declared a dividend of Rs 9.5 per share, while in 2020-21 it declared a dividend of Rs 8 per share. This takes the dividend yield on a share price of Rs 128, to the 6.5% levels. Being a company that is engaged in infrastructure lending, the downside risks are limited. PFC continues to maintain a healthy loan book, as well as low levels of non performing assets and has the highest net worth among NBFCs in India.

While for dividend yields the stock is a good bet, fundamentally too things look cheap. The stock is available at a price to book value of just 0.42 times, which makes it a good buy.

Disclaimer

Investing in stocks is risky and investors need to be cautious. Neither Greynium Information Technologies Pvt Ltd nor the author, would be responsible for any losses incurred based on decisions made from the article. Investors are also advised caution as the markets are now at a record high. Please consult a professional advisor and avoid investing lumpsum amounts.

PGIM India Flexi Cap Fund Direct Growth

This fund has been in existence for the last 6 years, as it was launched by the fund house PGIM India Mutual Fund in February 2015. PGIM India Flexi Cap Fund Direct-Growth gains over the past year were 71.43 percent and it has generated an average yearly return of 16.74 percent since its inception, according to Value Research. The financial, technology, healthcare, chemicals, and construction sectors account for the majority of the fund’s holdings. Infosys Ltd., ICICI Bank Ltd., Tata Consultancy Services Ltd., State Bank of India, and Axis Bank Ltd. are among the top five holdings of the fund.

One of the key benefits of the fund is it has a low expense ratio of 0.30% which is lower than other funds in the same category. The fund has Rs 1,371 Crore in assets under management (AUM) and a current NAV of Rs 26.88 as of July 22, 2021. A minimum monthly contribution of Rs 1000 is required to start a SIP in this fund, and the fund imposes an exit fee of 0.5 percent if units exceeding 10% are redeemed within 90 days of the investment.

Parag Parikh Flexi Cap Fund Direct Growth

PPFAS Mutual Fund’s Parag Parikh Flexi Cap Fund Direct-Growth is a multi-cap mutual fund scheme that has been around for eight years, having been established in May of 2013. The 1-year returns of Parag Parikh Flexi Cap Fund Direct-Growth are 58.89 percent. According to Value Research, it has provided an average yearly return of 21.14 percent since its inception. The fund has its equity sector allocation across technology, financial, services, automobile, and fast-moving consumer goods sectors.

Alphabet Inc Class A, Bajaj Holdings & Investment Ltd., ITC Ltd., Microsoft Corporation (US), and Facebook Co. are the fund’s top five holdings. The fund has a 0.89 percent expense ratio, which is comparable to other funds in the same category. As of July 22, 2021, the fund has Rs 11,360 crore in assets under management (AUM) and a current NAV of Rs 47.78. To commence a SIP in this fund, a minimum monthly contribution of Rs 1000 is required. If redeemed within 365 days, the fund imposes a 2% exit load; if redeemed after 365 days but on or before 730 days, the fund levies a 1% exit load.

UTI Flexi Cap Fund Direct Growth

UTI Flexi Cap Fund Direct-Growth is a multi-cap mutual fund strategy introduced by UTI Mutual Fund in January 2013. According to Value Research, UTI Flexi Cap Fund Direct-Growth returns for the previous year were 64.93 percent, and from its inception, it has generated an average yearly return of 17.23 percent. The Financial, Healthcare, Technology, Services, and Chemicals sectors account for the bulk of the fund’s holdings. HDFC Bank Ltd., Bajaj Finance Ltd., Larsen & Toubro Infotech Ltd., Housing Development Finance Corpn. Ltd., and Kotak Mahindra Bank Ltd. are the fund’s top five holdings.

The fund’s expense ratio is 1.2 percent, which is much higher than that of other funds in the same category. The fund has Rs 19,579 crore in assets under management (AUM) and a current NAV of Rs 246.99 as of July 22, 2021. A minimum monthly investment of Rs 500 is required to start a SIP in this fund. If more than 10% of the fund’s investments are redeemed within one year, the fund levies a 1% exit load.

Canara Robeco Flexi Cap Fund Direct Growth

Canara Robeco Flexi Cap Fund Direct-Growth is a multi cap mutual fund scheme launched by the fund house Canara Robeco Mutual Fund. This fund has been around for eight years, having started in January of 2013. According to Value Research, Canara Robeco Flexi Cap Fund Direct-Growth returns for the previous year were 50.85%, and it has generated 15.48 percent average annual returns since inception. The fund has its equity sector allocation across the Financial, Technology, Automobile, Energy, Healthcare sectors. Infosys Ltd., HDFC Bank Ltd., ICICI Bank Ltd., Tata Consultancy Services Ltd., and Reliance Industries Ltd. are the fund’s top five holdings as of now.

The major reason you should choose this fund is that it has a low expense ratio of 0.6 percent, which is lower than most other funds in the same category. As of July 22, 2021, the fund has Rs 4,813 crore in assets under management (AUM) and a current NAV of Rs 220.65. The fund charges an exit load of 1% if units are redeemed within 1 year of investment. One can start SIP in this fund with a minimum amount of Rs 1000.

Top Performing Flexi Cap Mutual Funds In 2021

Based on the historical returns and ratings given by the two leading agencies i.e. Value Research and Morningstar, here are the best flexi cap mutual funds to start SIP in 2021.

Should You Invest?

We at Goodreturns always suggest our readers to invest in mutual funds only through SIP mode to maximize returns. By keeping this factor in mind we would like to make you clear that, across the last 3 to 5 years Flexi Cap mutual funds have really performed well. According to Value Research, flexi cap mutual funds have provided average SIP returns of 25.71 percent over the previous three years and 16.85 percent over the last five years. If we look at the previous 1-year returns of flexi cap funds, we can see that they have the potential to outperform the top-performing large-cap funds in the long run.

Having any of the above-discussed flexi cap funds in your portfolio can proactively adjust to a blend of market conditions, as it is well known for excelling over market movements. In comparison to a mid-cap or small-cap fund, putting money in a flexi cap fund is less volatile. Considering the current market scenario, Flexi Cap fund is an attractive bet to invest in through SIP if you have a financial goal of 5 years or more.

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advise to buy or sell stocks, gold, currency or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in