PSU Stocks: Amidst the recent fluctuations in the Indian stock market, shares of public sector companies (PSU Stocks) have once again come on the radar of investors. The special thing is that some big PSU companies are currently trading with PE ratio below 10, while their earnings, cash flow, dividend and return ratios remain strong. Let us know about 5 such PSU shares-
1. Coal India
Coal India Limited, the country’s largest coal producing company, is currently trading at a PE ratio of around 8.3, which is much below its sector average. The company has been generating strong cash flows for a long time and its ROE is around 35.7 per cent, which is considered quite high in the PSU space. Coal India is also known as a company that gives regular and attractive dividends. In the recent trading session, its share price remained around Rs 418.
The country’s largest Oil and Natural Gas Corporation (ONGC) is also included in this list. ONGC’s PE ratio is around 8.4 and it often trades below the industry average. This government-owned company plays an important role in crude oil and gas production. Its ROCE is around 10.5% and it is considered a reliable dividend stock. The share price is currently seen around ₹246.
3. BPCL
Bharat Petroleum Corporation Limited (BPCL) is one of the major oil marketing companies in the country. The company’s PE ratio is around 7.2, which makes it quite attractive in terms of valuation. BPCL has a strong fuel distribution network across the country and its ROCE is around 16.4 percent. Dividend yield is also considered supportive. The company’s shares are currently trading around Rs 350.
4. Bank of Baroda
Bank of Baroda is counted among the comparatively strong performing banks in the PSU banking sector. The PE ratio of the bank is around 8.2 and there has been continuous improvement in asset quality. The ROCE of the bank is around 14% and the retail loan book is growing rapidly. In recent trading, the share price of Bank of Baroda remained around Rs 296.
5. Punjab National Bank (PNB)
It is the second largest government bank in the country. Its PE ratio is around 7.9, which makes it much cheaper than private banks. PNB has been focusing on reducing Non-Performing Assets (NPA) for the last few years. It has a strong branch network across the country. The ROCE of the bank is around 15%. The share price is currently around Rs 120.
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