Top 4 Least Expensive Stocks With The Lowest Price Earnings Ratio

Investors get into the stock markets for good quick gains as well as to accumulate a sizable corpus over the years for future financial goals. Nonetheless, for a layman to make a right bet in a stock available at an attractive valuation may be a tough call as it is just not the stock price that indicates whether the stock is cheaply priced or expensive.

Hence here is where the role of 5 fundamental valuation ratios comes into play including:

• Price to earnings ratio
• Return on Equity
• Price to book ratio
• Debt to equity ratio
• Price/earnings-to-growth ratio

Nevertheless, price to earnings multiple or P/E ratio is the most favourite to take the call. By price to earnings ratio we mean the scrip's market price divided by its earnings per share or EPS.

Now for determining the EPS one needs to divide the company's earnings or net profit by the existing outstanding shares in a scrip.

But herein we need to remember while deciding on the valuation, while P/E ratio is the most significant, it needs to be looked at in conjunction with other parameters. Also, if the two companies being considered are from different industries, they need not be compared on the basis of P/E multiple.

So, here we put across 4least expensive stock considering P/E multiple:

Oil India:

Incorporated in the year 1959, Oil India is a Navratna Company from the oil drilling and exploration sector. The second largest oil and gas company in the country is a fully integrated exploration and production company in the upstream segment. The state-owned GoI entity is administered by the Ministry of Petroleum and Natural Gas.

Now coming to its P/E as against the sector P/E of 15.9, the scrip of Oil India comes to be cheap with TTM P/E of 5.65. Note TTM in the stock market parlance implies trailing 12 months or TTM and is used to indicate financial data considering the numbers from the last 12 straight months. Typically it symbolises the company's performance in the 12-month period.

Other factors also being referred to the scrip's RoE comes to be 14.9%, while its debt to equity stands at 0.82, i.e. below 1. The stock last traded at a price of Rs. 210.95 per share on the NSE.

Coal India:

The largest coal producing entity globally, Coal India is also into producing coking coal of several qualities as well as non-coking coal. Further the company is also into coal mining. The company's clientele primarily includes cement and steel producing companies, industrial entities both in the private and public domain as well as thermal power producers.

For the large cap scrip, the TTM P/E ratio is at 6.83 while the sector's P/E is over 11. Other peer companies such as Auroma Coke has a TTM P/E of 32.83.

Notably the RoE on the scrip is at a good 35%, while the D/E is barely at 0.16.

The PSU entity is also handsomely paying off dividend with dividend yield at a good over 10 percent considering the dividend declared for the Fy21 of Rs. 16 per share.

NTPC:

Another large cap company NTPC is into the core business of power generation and distribution commands a low P/E of 7.99 as against the sector's P/E of 23.55. However the debt to equity situation and RoE are not great. Nonetheless, it shall still fall among the cheaply priced or least expensive stock category.

NTPC is the country's top power utility firm that is gearing up to become a 130 GW company by the year 2032.

CESC:

Another company from the power- generation and distribution space, CESC which stands for The Calcutta Electric Supply Corporation is a Kolkata based flagship company of theRP- Sanjiv Goenka Group. The company also owns and operates the T&D System via which it supplies power. Also the company is tapping into renewable sources.

TTM P/E for the stock is at 8.7 while the sector P/E signifying valuations is 23.55. Notably some of the peer companies such as Tata Power and Adani Transmission carry a very high P/E.

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