Financial Daily from THE HINDU group of publications
Sunday, Nov 16, 2003
Financial Daily from THE HINDU group of publications Sunday, Nov 16, 2003 |
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Investment World
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Stocks Markets - Recommendation Money & Banking - Stocks Chola Inv: Dividend yield pick BUY Suresh Krishnamurthy
FRESH investments in the stock of Cholamandalam Finance can be considered. The company has been benefiting from the boom in retail lending. This is reflected in the growth in earnings reported by the company in the last several quarters. Companies such as Cholamandalam Finance are also not completely devoid of competitive advantages compared to other intermediaries such as banks. Therefore, maintaining profit growth is possible. In addition, the company's foray into asset management, general and life insurance may also deliver value over a longer-term. The valuation of the stock at a price to earnings multiple of less than five is also attractive. In addition, the company looks set at least to maintain the dividend of Rs 5 per share, which means the dividend yield, is attractive at nearly 8 per cent. The stock is also trading at a price below its book value making it attractive.
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