Is bank of baroda blue cheap stock
7/17/2024 10:52am
**Bank of Baroda is not a blue chip stock**, as it does not meet the typical criteria of being a large, established, and financially stable company. However, whether or not it is considered a "cheap" stock depends on the context and comparison with other stocks.
1. **Intrinsic Value and Market Price**: The intrinsic value of one BANKBARODA stock is estimated at 388.48 INR, which is significantly higher than the current market price of 258.85 INR. This suggests that the stock may be undervalued compared to its intrinsic value, making it relatively "cheap" from that perspective.
2. **Profitability and Growth**: Bank of Baroda has shown strong profitability with a significant gain in EPS over the last three years, and it is forecasted to grow earnings and revenue annually. This indicates a strong potential for future profitability and growth, which is often associated with higher stock valuations.
3. **Dividend and Income**: The bank pays consistent dividends, which are well-covered by earnings, indicating resilience in its financials. This adds to the attractiveness of the stock for income-focused investors.
4. **Market Performance and Outlook**: The stock has shown a consistent upward trend in performance, outperforming BSE 500 in each of the last 3 annual periods. The stable outlook rating from Fitch and recognition for strong provisioning practices further support a positive market outlook.
While Bank of Baroda may not be a blue chip stock, its strong financials, growth prospects, and attractive valuation make it a compelling investment option. However, investors should consider their investment goals and risk tolerance before making a decision.