Up To 400% Dividends: HAL, BEL, Mazagon Dock Among Top 5 Most Valued Aerospace & Defence Stocks In 2023

Aerospace and defence stocks were among the star performers of 2023 on the back of a strong order book and huge pipeline. The top five most valued defence stocks are Hindustan Aeronautics (HAL), Bharat Electronics, Solar Industries, Bharat Forge, and Mazagon Dock Shipbuilders. Two of them are multi-baggers with triple-digit returns YTD. These companies have also paid hefty dividends in the current year.

Here are the details of dividends and share prices of the top 5 defence companies in terms of market valuation:

1. Hindustan Aeronautics (HAL):

Riding on the back of the bull, HAL emerged as the top most valued firm in terms of market share under the aerospace and defence segment. HAL shares on December 8th struck a new record high of Rs 2,782.90 apiece before ending at Rs 2,733.15 apiece up by 1.59%. The stock has been hitting back-to-back new highs for the past two weeks.

Its market cap is at Rs 1,82,786.24 crore.

HAL shares six-monthly gain is around 48%, while year-to-date, the stock has become a multi-bagger with gains of more than 115%. In 5years, the stock has advanced by a huge 610.87%. This is adjusted to its recent stock split. The stock's 5-year CAGR (Compounded Annual Growth Rate) is at 41.25%.

In 2023, HAL declared up to Rs 35 dividend per share or 350% for shareholders. For FY23, it paid the second and third interim dividends of Rs 20 per share and Rs 15 per share, for which the share price turned ex-dividend on March 23 and August 24 respectively. The first interim dividend of Rs 20 per share or 200% was paid last year for the same fiscal.

Incorporated in 1940, the Bangalore-headquartered HAL is is one of the oldest and largest aerospace and defence manufacturers in the world.

2. Bharat Electronics:

BEL shares have jumped by 33% in six months, and year-to-date the upside is higher by 58%. In five years, the stock scaled up by 478% on BSE. Its 5-year CAGR is at 35.04%.

On BSE, BEL shares ended at Rs 158.70 apiece, down by 1%. Earlier this week, the shares hit a new 52-week high of Rs 163 apiece. As of December 8, the company's market value is at Rs 1,16,006.19 crore.

This Navratna Defence PSU has declared a total of 180% dividends aggregating to Rs 1.8 per share for FY23. The dividend was announced in series of Rs 0.6 each or 60% in January, March, and May.

Established in 1954, BEL engages in the manufacturing of specialised electronic equipment requirements of the Indian Defence Services. BEL produces a wide range of equipment for areas such as defence communication, radars, naval systems, c4i systems, weapon systems, homeland security, telecom & broadcast systems, electronic warfare, tank electronics, electro-optics, professional electronic components and solar photovoltaic systems.

3. Solar Industries:

On BSE, Solar's share price settled at Rs 6,298.10 apiece, up by Rs 6.80 or 0.11% with a market cap of Rs 56,991.54 crore. YTD, the stock has rallied by over 42%, and its six-monthly gain is even higher by more than 62%. In 5-years, the stock has zoomed by a huge 493%.

In 2023, so far, the company paid a dividend of up to 400% amounting to Rs 8 per share. Currently, it has a dividend yield of 0.13%.

By the end of November 2023, brokerage Angel One reported that Solar Industries' 5-year CAGR was 45.94%, the highest among its peers like HAL, BEL, and Bharat Dynamics among others.

Solar Group has evolved from a single-site manufacturing company in 1995 to a globally recognised Industrial Explosives manufacturer currently.

Bharat Forge:

Currently, this forging stock is flirting around its 52-week high. On December 8th, the stock ended at Rs 1176.95 apiece, up by 1.04% on BSE after hitting the day's high of RS 1180.00 apiece. From this level, the stock is less than Rs 10 away from touching its 1-year high.

In six months, Bharat Forge shares jumped by nearly 43%, while the year-to-date upside is over 33%.

So far, in 2023, the company has paid a dividend of 275% amounting to Rs 5.50 per share.

Its 5-year CAGR is at 13.86%. The stock has gained by nearly 130% in a 5-year span.

Bharat Forge manufactures an extensive array of critical and safety components for several sectors including Automobiles (across Commercial and passenger Vehicle), Oil and gas, Aerospace, Locomotives, Marine, Energy (across renewable and non-renewable sources), Construction, Mining and General Engineering.

Mazagon Dock Shipbuilders:

Mazagon Dock is the top performance defence and shipping stock of 2023, as it gives triple-digit returns. Year-to-date, the stock skyrocketed by 161%, while six-monthly gain is nearly 97%. In post-COVID, Mazagon Dock shares have rallied by a breathtaking 1,123.50% on BSE.

This week, Mazagon Dock paid an interim dividend of Rs 15.34 per share aggregating to Rs 309.39 crore for FY24. The stock turned ex-dividend on November 20th and had announced the payout date on or before December 7, 2023. In FY23 alone, the company paid a total dividend of 159.60% amounting to Rs 15.96 per share.

On BSE, Mazagon Dock shares ended at Rs 2056.10 apiece, down by 1.08% with an m-cap of Rs 41,469.48 crore.

The stock's price-to-equity ratio is 33.05x, and its return on equity (ROE) is 26.28%.

Since 1960, MDL has built a total of 801 vessels including 27 warships, from advanced destroyers to missile boats and 7 submarines. MDL has also delivered cargo ships, passenger ships, supply vessels, multipurpose support vessels, water tankers, tugs, dredgers, fishing trawlers, barges & border outposts for various customers in India as well as abroad. MDL has also fabricated and delivered jackets, main decks of wellhead platforms, process platforms, jack-up rigs etc.

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