Top 5 Monopoly Stocks 2024: Watch Out for These Gems

The stock market, a sprawling bazaar of endless possibilities, whispers of fortunes made and dreams come true. But amid the bluster, certain stocks hum a different tune - the melody of market dominance.

These, the monopoly stocks, rise like titans, casting shadows over their industries.

These are the kings and queens of their kingdoms, dictating terms, controlling prices, and leaving rivals weeping in their dust.

For investors, they offer unparalleled stability, predictable growth, and dividends fat enough to rival Midas's touch.

These monopolies are rare.

In our previous article, we wrote about the top five monopoly stocks. In this article, we will discuss five more monopoly stocks to keep an eye on.

#1 Zydus Wellness

First on the list is Zydus Wellness.

Zydus Wellness has over 90% market share in sugar-free products. Its product 'Sugar-Free' has a strong presence in India, with a 94% market share in the sugar substitute category.

The company has various other brands in its portfolio such as Complan, EverYuth, Nycil, Glucon-D, Sugarlite, and Nutralite.

What sets Zydus Wellness apart as a strong monopoly player is its strategic association with Cadila Healthcare, its parent pharmaceutical company.

With Cadila Healthcare holding a substantial 57.6% stake in Zydus Wellness, the company gains access to a robust research facility.

This symbiotic relationship with Cadila Healthcare not only strengthens Zydus Wellness' research capabilities but also reinforces its position as a monopoly player by assuring quality and safety standards across its product range.

In the past three years, the company has demonstrated notable growth, boasting a 3-year CAGR of 6.5% in sales and a remarkable 37.7% in net profits, largely attributed to an increase in demand.

Looking ahead, the company has plans to spend on research and development in FY24.

For more details, see the Zydus Wellness company fact sheet and quarterly results.

#2 Hindustan Zinc

Second on the list is Hindustan zinc.

Hindustan Zinc is the world's second-largest zinc-lead miner and holds a 78% market share in India's primary zinc industry.

The company was incorporated as Metal Corporation of India in 1966 as a public sector undertaking.

Today, the company is a subsidiary of Vedanta Limited, which owns a 64.9% stake in the company while the Government of India holds a 29.5% minority stake.

The company has a mined metal capacity of around 1.2 million tonnes per annum, and it is aggressively expanding its mining capacities with six ongoing major mining projects.

Hindustan Zinc, the world's second-biggest zinc producer, operates the world's third-largest open-pit mine and the world's largest zinc mine in Rampura Agucha, Rajasthan.

Since 2013, Hindustan Zinc has paid more in dividends alone than Bajaj Finance, Asian Paints, and Titan Company have made in profits combined!

Further, the average 5-year dividend yield for Hindustan Zinc is a whopping 10.6%. Meanwhile, the average dividend payout ratio stands at 165.1%.

The company stands among the stocks with the highest dividend yields in FY23.

From a financial perspective, the company has experienced remarkable growth in the past three years. Sales and net profits have displayed an impressive 3-year CAGR of 14.6% and 9.6%, primarily driven by escalating demand.

The company has started the deployment of EV trucks at one of its mines. The company officially launched the first fleet of electric vehicles in partnership with Inland EV Green Services.

For more details, see the Hindustan Zinc company fact sheet and quarterly results.

#3 Container Corporation

Third on the list is the Container Corporation of India.

The company is a public sector undertaking managed by the Indian Ministry of Railways. It was set up in 1966 to containerise cargo transport in the country.

Concor's core businesses include cargo carriers, terminal operators, warehouse operators & MMLP operations.

It handles nearly 75% of the containers transported via railways.

Rail container transportation is a capital-intensive business, and Concor has an enviable first-mover advantage in this segment. Until 2006, it was the sole operator in the industry.

Since 2006, other players have entered this industry, but none of them have been able to replicate the network and infrastructure that Concor has.

The company has registered a significant growth over the last three years. The sales and net profit have grown at a 3-year CAGR of 8.3% and 32.8%, respectively.

Going forward, the company will haul fast-moving consumer goods (FMCG) cargo as the Navratna company seeks to boost its domestic market share by weaning away a portion of the consumer durables business, moving mainly by road.

For more details, see the Container Corporation company fact sheet and quarterly results.

#4 Asahi India Glass

Fourth on the list is Asahi India Glass.

It is India's leading value-added and integrated glass solutions company. It's a dominant player, both in the automotive and architectural glass.

Asahi India provides end-to-end solutions in the entire glass value chain - from the manufacturing of float glass to fabrication.

It has around 77% market share in the automotive glass segment.

With this dominant position in the Indian auto glass market, the company is recognised as a go-to supplier.

Turning to the financial aspect, in the preceding three years, the company has witnessed a compound annual growth rate (CAGR) of 18.4% in its revenue and a substantial 43.9% in net profit on the back of cost reduction practices.

Going forward, the company plans to increase its architectural glass production capacity.

For more details, see the Asahi India company fact sheet and quarterly results.

#5 NRB Bearings

Last on the list is NRB Bearings.

NRB Bearings was set up as a joint venture with Nadella, France, the oldest needle bearing manufacturer in the world, for the manufacture of needle rollers, needle cages, needle bushes, and needle roller bearings.

NRB commands a formidable 70% share of bearings used in Indian vehicles. This dominance translates to a trusted brand, with every car on Indian roads humming with NRB technology.

From humble beginnings in 1965 as India's first needle roller bearing manufacturer, NRB has grown into a multi-faceted giant, its bearings powering everything from everyday vehicles to complex industrial machinery.

In the last three years, the company has seen an 11.5% CAGR increase in revenue and an impressive 19.9% rise in net profit, primarily attributed to consecutive order wins.

Recently, NRB Bearings has secured order wins from prominent two-wheeler electric vehicle (EV) manufacturers. This development serves as a significant trigger for the company's future growth prospects.

With the expanding market for EVs and the increasing focus on sustainable transportation, NRB Bearings stands to benefit from its association with leading two-wheeler EV manufacturers.

For more details, see the NRB Bearings company fact sheet and quarterly results.

Conclusion

Investing in monopoly stocks has its fair share of advantages and disadvantages. On the positive side, these stocks often provide a stable and predictable source of income.

Their ability to control pricing and dominate markets can result in consistent profitability.

Additionally, they tend to weather economic downturns better than most companies, making them a safe haven during uncertain times.

However, there are downsides to consider. Monopoly stocks can sometimes face regulatory scrutiny due to their market dominance, which may lead to legal challenges and potential limitations on their operations.

Furthermore, because of their already significant market share, the room for explosive growth might be limited compared to smaller, more nimble competitors.

Diversification can also be a concern, as a portfolio heavily concentrated in monopoly stocks may lack balance and exposure to other industries.

Therefore, conducting thorough research is advisable before considering investments in these stocks.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...