Cash Rich Companies – Revenue is vanity, margin is sanity and cash is king.Cash is everything today keeping this reality in mind let’s discuss Top 5 Best Cash Rich companies of India.
The companies, which I will be discussing are cash rich (with a lot of surplus money) and they will able to utilize this cash for business expansion, acquiring new business and passing on several benefits to shareholders like extra dividend, bonus, debentures etc.
Why it is best to Invest in Cash Rich Company in the current situation?
Making money from the stock market is not an easy task especially in the current situation where market is direction less. Investing in cash rich companies is one way to minimize the risk involved in the investment. It is advisable to invest in these cash rich companies for the long term perspective.
Top 5 Best Cash Rich Companies for Investment
Top 5 Best Cash Rich Companies list includes Infosys, Maruti Suzuki, Hindustan Unilever, TCS and Bajaj Auto. These companies are sitting on very high cash reserve. Apart from these companies total 135 other companies are also cash rich with a cash surplus of 100 Cr and above.
Performance History Top 5 Best Cash Rich Companies
Hindustan Unilever is first in the list of cash rich companies. Hindustan Unilever deals in multiple personal care and food products. If we check past five years performance of Hindustan Unilever, it is extremely good. Company is able to generate consistent positive returns for the investors in past five years. Apart from positive returns, from 2001 onwards Hindustan Unilever has always given very good dividend above 200%.
Maruti Suzuki is leader of Indian Car Market. This stock is on second position at cash rich company list. Maruti is generating almost constant positive returns to investor YOY. In last five year Maruti has generated four time positive returns for the investors. Dividend history of Maruti Suzuki is also very good. Final dividend paid by company for the year 2015 was 500% (Rs 25 per share).
Infosys is leader in IT industry. Infosys is cash rich company. Infosys has multiple domestic and international customers. Infosys is very good bet for long term investment. In last five years Infosys was able to generate three time positive returns for the investors. Infosys is very good company in terms of providing dividend. They have very good history of providing bonus shares. You should make an investment in Infosys for long term prospective.
TCS is another IT giant of India. TCS provide consultancy and business solutions to other companies all over world. TCS is cash rich company. This cash helped a company to complete multiple acquisitions in past few years. TCS is generating very good returns for the investors. In past five years TCS has given four times positive returns to investors.
Bajaj Auto is last in the list of cash rich companies. Bajaj is auto sector giant. Bajaj offers multiple two-wheeler and three-wheeler products to Indian. Bajaj Auto has generated two-time positive returns in past five years for the investors. Dividend history of stock is also very good.
Over to You
You should not invest your money only based on cash and debt levels of the company. You must consider other factors like book value, earning per share, price to earning ratio, future business prospects, past performance etc while investing.
Extra cash reserve also indicates that company has big surplus money, but not utilizing it properly. This can lead to lower return on equity. You should invest in cash rich companies, which produce constant cash flow and making investor happy by giving good dividend.