Which are the top FMCG companies in India right now?
As per Equitymaster's Stock Screener, here is a list of the top FMCG companies in India right now...
- #1 ITC
- #2 HUL
- #3 NESTLE
- #4 GODREJ CONSUMER
- #5 BRITANNIA
These companies have been ranked as per their market capitalization. The higher the market cap, the higher the total value of the company.
Of course, there are other parameters you should take into account before forming a hard opinion on the stock valuation.
When should you invest in the FMCG sector?
As there is a constant demand for FMCG products, stocks from the FMCG sector provide consistent dividends and stable earnings regardless of the state of the overall stock market.
For this reason, they are often called defensive stocks and can protect your portfolio during bad times.
However, in a sustained bull run, FMCG stocks will underperform the market.
Therefore, the best time to buy FMCG stocks is when there is a gloomy picture on earnings for manufacturing sectors, lower crude prices and higher interest rates.
Since defensive sectors are less prone to the above-mentioned risks, they offer lot of value in uncertain times.
Where can I find a list of FMCG stocks?
The details of listed FMCG companies can be found on the NSE and BSE website. For a curated list, you can check out our list of FMCG stocks.
What kind of dividend yields do FMCG stocks offer?
FMCG stocks in general have consistent and stable dividend paying track records owing to the asset light business models, low capex requirements, consistency in earnings and strong cash flows.
For more details, check out our list of top FMCG stocks offering high dividend yields.
How should you value FMCG companies?
Investing in stocks requires careful analysis of financial data to find out a company's true worth. However, an easier way to find out about a company's performance is to look at its financial ratios.
Two commonly used financial ratios used in the valuation of stocks are -
Price to Earnings Ratio (P/E) - It compares the company's stock price with its earnings per share. The higher the P/E ratio, the more expensive the stock.
To find stocks with favorable P/E Ratios, check out our list of FMCG stocks according to their P/E Ratios.
Price to Book Value Ratio (P/BV) - It compares a firm's market capitalization to its book value. A high P/BV indicates markets believe the company's assets to be undervalued and vice versa.
To find stocks with favorable P/BV Ratios, check out our list of FMCG stocks according to their P/BV Ratios.