ONGC Vs Oil India: Splits, Bonus Issues, Dividends, Fundamentals; Which Super Maharatna PSU Stocks To Buy?

Two Maharatna PSU stocks, ONGC and Oil India are buzzing as international crude oil prices continue to accelerate. Both the stocks have healthy fundamentals and are top picks of brokerages. YTD, the stocks have zoomed between 70-80%. However, only one of them is on the path to reward shareholders with double perks such as bonus issues and dividends.

ONGC is the largest oil and gas company in terms of market share, while Oil India is among the midcaps.

ONGC:

Share Price: The stock is currently trading at Rs 274.90 apiece with a market cap of Rs 3,46,020.58 crore. ONGC is near its 52-week high of Rs 292.95 apiece and is up by 77% from its 52-week low of Rs 155.40 apiece. YTD, the stock rallied by 34%. In a year, the stock is up by 74%.

Bonus Issues: ONGC has a healthy record of paying bonuses periodically. Earlier, the company delivered bonus shares of 1:2 in December 2016, following a 1:1 bonus issue in February 2011, and lastly 1:2 bonus issue again in October 2006.

Stock Splits: ONGC has split once in its history. It was in February 2011, that the stock was subdivided into a 2:1 ratio, meaning that 1 equity share having a face value of Rs 10 split into two shares with a face value of Rs 5 each.

Dividends: This largest CPSE in the oil and gas sector has a strong history of paying dividends to investors. Since August 2000, ONGC delivered up to 57 dividends. Recently, in 2024, the company paid a dividend of Rs 4 per share. Overall, in FY24, the company announced dividends of 245% amounting to Rs 12.25 per share. Currently, it has a dividend yield of 4.44%.

Fundamentals: As per Trendlyne data, the stock rose 75.67% and outperformed its sector by 29.65% in the past year. Its Debt to Equity Ratio of 0.36 is less than 1 and healthy, implying that its assets are financed mainly through equity. Also, the Price to Earning Ratio is 7.32, lower than its sector PE ratio of 21.97. Additionally, the return on Equity(ROE) for the last financial year was 14.6%, in the normal range of 10% to 20%.

BUY/SELL: Antique Stock Broking has suggested BUY on ONGC for a target price of Rs 332. Meanwhile, JM Financial has also suggested BUY with a target price of Rs 300. Notably, Motilal Oswal has set the highest target of Rs 340 with a buy call on ONGC.

Oil India:

Share Price: Ahead of its bonus issue, Oil India's share price dipped over 2% to trade at Rs 676.90 apiece on BSE with a market cap of Rs 73,614.85 crore. The stock is still very close to its 52-week high of Rs708.8 apiece and has more than doubled from the 52-week low of Rs 240.65 apiece.

Bonus Issues: Currently, Oil India is set to pay bonus issues in the ratio of 1:2, meaning 1 bonus share for free on existing 2 equity shares having a face value of Rs 10 each. The record date is fixed on July 2, 2024. This will be Oil India's fourth bonus share in less than fifteen years. The last time Oil India distributed free bonus shares was in March 2018 in a ratio of 1:2. Before this, Oil India also delivered a bonus issue of 1:3 in January 2017, and a 3:2 bonus in March 2012.

Stock Split: Oil India has never carried a stock split.

Dividend: Just like bonus issue, Oil India is also set to pay final dividend of Rs 3.75 per equity share having a face value of Rs. 10/- each (pre-bonus), which translates into a final dividend of Rs. 2.50 per equity share having a face value of Rs. 10/- each (post-bonus) for the financial year 2023-24, subject to the approval of the shareholders of the Company. This will be in addition to interim dividends of Rs 3.50 per share and a second interim dividend of Rs 8.50 per share. Since February 2010, Oil India has delivered up to 35 dividends. YTD, the stock is up by 80%. While in a year, the stock rallied by 167%.

Fundamentals: As per Trendlyne data, the stock rose by 171.71% and outperformed its sector by 125.69% in the past year. Its Debt to Equity Ratio of 0.49 is less than 1 and healthy, implying that its assets are financed mainly through equity. Further, Price to Earning Ratio is 11.83, lower than its sector PE ratio of 21.97. Additionally, the Return on Equity(ROE) for the last financial year was 13.1%, in the normal range of 10% to 20%.

BUY/SELL: Antique Stock Broking is also upbeat on Oil India and has recommended BUY with a target price of Rs 725. A similar target is set by JM Financial with a BUY call. Meanwhile, Motilal Oswal sets the highest target of Rs 775 apiece on Oil India with a BUY recommendation.

Maharatna ONGC is the largest crude oil and natural gas Company in India, contributing around 71 per cent to Indian domestic production. Crude oil is the raw material used by downstream companies like IOC, BPCL, HPCL and MRPL (The last two are subsidiaries of ONGC) to produce petroleum products like Petrol, Diesel, Kerosene, Naphtha, and Cooking Gas LPG.

Also, a Maharatna Company, OIL is a state-owned enterprise of the Government of India, under the administrative control of the Ministry of Petroleum and Natural Gas and is the second largest national oil and gas company in India.

Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.