Indian Oil Corporation

The corporation has declared a bonus of 1:2. This means if you own 100 shares, you will receive bonus shares of 50. The stock of the company goes ex bonus on June 30, 2022 and the record date for the same is July 1, 2022. The company has also declared a final dividend of Rs 3.60 per equity share (pre-bonus), which translates into a final dividend of Rs 2.40 per equity post-bonus for the financial year 2021-22. So, not only in terms of bonus shares, but, also in terms of dividend the stock is a good bet. At the current market price, the stock based on last year’s dividends of Rs 11.4 per share, gives a dividend yield of almost 9%. However, the only worry for the company right now is rising crude prices. However, even when there was low demand due to covid, the company managed to retain dividends.

IOC: Financial performance

The company reported a weak set of numbers with Q4FY22 standalone net profit declining 31.4 per cent year-on-year (YoY) to Rs 6,022 crore on a margin squeeze in petrochemicals and losses on auto fuel sales. It’s pertinent to note here that the company’s performance was impacted largely because they did not hike petrol and diesel prices on account of elections in key states. This led to some impact on profits. Some brokerage firms have remained upbeat on the stock of IOC and have recommended a buy on the stock. “We expect a dividend payout to be 51% in FY23-24 as well. IOCL trades at 7.5x consolidated FY24E EPS and 0.8x FY24E P/BV. It is likely to benefit the most among its peers from an uptick in refining margin, further supported by a robust petchem margin in the near term. We value the stock at 1x FY24E P/BV to arrive at our target price of Rs 164, an upside of 32%. We maintain our Buy rating,” brokerage firm Motilal Oswal has said.

Varun Beverages: Another stock with bonus issue of shares

Like India Oil, Varun Beverages too has declared bonus issue of shares in the ratio of 1:2. The company has fixed the record date for the ex bonus as June 7 with the ex date being June 6. This means, if you want bonus issue of shares, you should buy the stock by the end of trading day on June 5. Recently, CRISIL Ratings upgraded its rating on the long-term bank facilities of the company. The rating agency has upgraded the rating to ‘CRISIL AA+’ from ‘CRISIL AA’ and revised the outlook to ‘Stable’ from ‘Positive’. Varun Beverages Limited is a key player in beverage industry and one of the largest franchisee of PepsiCo in the world (outside USA).

Disclaimer

Investing in stocks is risky. Neither the author, nor Greynium Information Technologies Pvt Ltd, should be held responsible for losses incurred based on the decision in the article. Markets have turned extremely volatile and hence caution is advised before investing. The author and his family do not own shares of IOC or Varun Beverages as on the date of writing this article.