HAL Vs BDL: Dividends, Splits, Bonuses; Mega Zero-Debt Stocks Give 0-1% Returns In 1 Month, Which To Buy?

Zero debt defence PSU giants, Hindustan Aeronautics (HAL) and Bharat Dynamics (BDL) recorded 0-1% returns in 1-month, underperforming benchmarks Nifty and Sensex that gained by 3% each. YTD, both HAL and BDL shares have surged sharply by 49% to 67%, including holding a strong track record of rewarding investors with dividends. The stocks have also turned ex-split in a year.

Both companies are debt-free. However, both have underperformed in their sector. As per Trendlyne data, despite HAL and BDL emerging as multi-baggers in 1-year with gains of 136% and 124%, the stocks have still underperformed their sector by 2.8% and 14.1% respectively.

Meanwhile, data from BSE showed that HAL has a price-to-equity ratio of 38.26x with a price-to-book ratio of 10.82% and a strong return on equity of 28.29%. Also, BDL's PE and PB ratio is at 81.76x and 13x along with a RoE of 15.90%.

Which of the two mega defence PSU stocks to buy?

Hindustan Aeronautics (HAL):

Share Price: After market hours, HAL shares ended at Rs 4700.65 apiece, with a market cap of Rs 3,14,367.72 crore. In a month, the stock is only up 0.7% on BSE, while YTD, the stock surged by 66.3%.

Dividend: HAL has delivered up to 12 dividends since March 2019. While in the past 12 months, the payout is to the tune of Rs 35 per share. Currently, it has a dividend yield of 0.74%.

Stock Split: HAL has carried stock split only once in the ratio of 1:2. The stock turned ex-split on September 28, 2023, where its face value split from Rs 10 each to Rs 5 each.

Bonus Issue: However, HAL has not carried any bonus issue.

BUY/SELL?

As per Trendlyne, the consensus recommendation from 13 analysts for Hindustan Aeronautics Ltd. is BUY. Of the total, 8 analysts have recommended 'STRONG BUY' and three analysts have suggested 'BUY'. The average 1-year target price is set at Rs 5,238.75 apiece, hinting at a potential upside of 11.4%.

Meanwhile, Antique Stock Broking has recommended BUY for a target price of Rs 6,145 on HAL.

Bharat Dynamics (BDL):

Share Price: BDL's share price ended at Rs 1289.45 apiece, with a market cap of Rs 47,266.40 crore. In a month, the stock dipped sharply by 8.9% on BSE, while YTD, the stock advanced by 49.4%.

Dividend: Since September 2018, BDL has delivered up to 12 dividends. In the last 12 months, the company delivered about Rs 10.05 per share. Meanwhile, at the current market price, BDL has a dividend yield of 0.4%.

Stock Split: Just like HAL, BDL has also carried a stock split only once and that was also in the ratio of 1:2. However, unlike HAL, BDL's stock split took place this year. The stock turned ex-split on May 24, 2024, with face value trimming from Rs 10 each to Rs 5 each.

Bonus Issue: BDL has also not distributed any bonus shares like HAL yet.

BUY/SELL?

As per Trendlyne data, the consensus recommendation from 6 analysts for Bharat Dynamics Ltd. is BUY. Of the total, four analysts have recommended 'STRONG BUY'. The 1-year average target price is set at Rs 1,511, hinting at over 17% potential upside ahead.

Also, Antique suggests BUY for a target price of Rs 1,579.