5 stocks with zero debt, high alpha to invest in

04 Dec , 2021 By : Kanchan Joshi

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 Rs1160 to Rs4,751 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 Rs495 to Rs1,738 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 Rs1100 to Rs3641 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 Rs173.69 to Rs505.50 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 Rs817 to Rs2348.50 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.