5 Best Low Risk High Return Stocks to invest in 2022

Top 5 Best Low Risk High Return Stocks to invest in 2022Many of us know that investment in stocks are high risk. Experts always advice investors to invest in index stocks or top performing stocks from Nifty50 which could be sure shot winners. However picking up such stocks from this list is biggest challenge. What if we can filter some stocks which are consistent performers in the last 1 year, 3 years and 5 years? What if such stocks always beaten Nifty50 index during this period? In this article we would details about 5 Best Low Risk High Return Stocks to invest in 2022 which have beaten the index consistently.

How we filtered these Top 5 Low Risk High Return Stocks?

This is a continuation series to our earlier article about Top 5 Multibagger Stocks that are doubling every 4 years and 5 Midcap Multibagger Stocks that tripled every 3 years.

Nifty50 has generated 6% returns in last 1 year, 44% returns in last 3 years and 68% returns in the last 6 years.

We followed below approach to filter these low risk high return stocks.

1) We have filtered stocks that have be beaten Nifty50 in last 1 year (> 6% returns). We could get 21 stocks out of Nifty 50 stocks.

2) We further short listed stocks that have beaten Nifty50 returns in last 3 years (>44% returns) from this list. We could get 15 stocks out of these 21 stocks.

3) We have again filtered stocks that have beaten Nifty50 returns in last 5 years (>68% returns) from this list. We could get 5 stocks out of these 15 stocks.

Means, these Top 5 Stocks have generated over 6% returns in last 1 year, over 44% returns in last 3 years and over 68% returns in last 5 years. This is irrespective whether there was covid pandemic, Russia-Ukrain War, fear of recession, fear on interest rate etc. This list also proves that such stocks sustained in recent fall of over 15% of Nifty50. Hence we have classified these stocks as low risk and high returns stocks.

5 Best Low Risk High Return Stocks to invest in 2022

Here is the list of these low risk high return stocks.

1) M&M

2) Bharti Airtel

3) ICICI Bank

4) SBI

5) Adani Ports

Top 5 Low Risk High Return Stocks in 2022 – Detailed View

Let us understand these company business, financial performance and how they performed in the last 1 to 5 years.

1) M&M – CMP Rs 1,181

About the Company

Mahindra & Mahindra Limited operates in nine segments. The automotive segment includes sales of automobiles, spare parts and related services. Farm equipment segment includes sales of tractors, spare parts and related services; information technology (IT) services, which consists of services rendered for IT and telecom; financial services includes services relating to financing, leasing and hire purchase of automobiles and tractors; steel trading and processing includes trading and processing of steel; infrastructure includes operating of commercial complexes, project management and development; hospitality segment includes sale of timeshare; Systech segment includes automotive

Financial Performance

Its standalone revenues grew from Rs 48,685 Crores in FY18 to Rs 57,445 Crores in FY22.

Its standalone margins grew from Rs 4,356 Crores in FY18 to Rs 4,935 Crores in FY22.

Positive Factors in the company

Strong revenue growth in the last 5 years

Strong profit growth in the last 5 years

Strong Annual EPS Growth

ROE and RoA improving in the last 2 years

Book value per share increasing in the last 2 years

Negative Factors in this company

There is increasing trend in non core income.

Share Price Performance

1 year – 55%

3 years – 106%

5 years – 69%

2) Bharti Airtel – CMP Rs 678

About the Company

Bharti Airtel Limited is the leading telecom services company in India that requires no introduction. It operates in 18 countries across South Asia and Africa, as well as the Channel Islands.

Financial Performance

Its revenues grew from Rs 25,747 Crores in FY18 to Rs 31,500 Crores in FY22

Its margins grew from Rs 983 Crores in FY18 to Rs 3,001 Crores in FY22

Positive Factors in the company

Company has strong revenue growth in the last 5 years

Company generated strong profit growth in the last 5 years

Strong Annual EPS Growth

RoCE, RoE and RoA improving in the last 2 years

Company with zero promoter pledge

Negative Factors in this company

Company has high debt

Company not able to generate net cash

Share Price Performance

1 year – 31%

3 years – 103%

5 years – 79%

3) ICICI Bank – CMP Rs 800

About the Company

ICICI Bank Ltd is India`s second-largest bank. The service offered by the company includes Deposits, Loans ,Cards, Investments & Insurance & Demat. In the NRI segment services offered include Money Transfer, Bank Accounts, Investment, Home Loans, Insurance, Loans against FD, etc.

Financial Performance

Its revenues grew from Rs 62,162 Crores in FY18 to Rs 95,406 Crores in FY22

Its margins grew from Rs 9,100 Crores in FY18 to Rs 25,784 Crores in FY22

Positive Factors in the company

Company had strong revenue growth in the last 5 years

Its margins have improved significantly in the last 5 years

Book value per share is increasing in the last 2 years

FII and FPIs are increasing their stake in the company

Strong momentum in share price in short term, medium term and long term

Highest analyst ratings with upside of over 25%

Negative Factors in this company

Company not able to generate net cash

Increase in NPA in recent results

Share Price Performance

1 year – 22%

3 years – 92%

5 years – 161%

Earlier we have recommended ICICI Bank in Top 5 Consistent Peforming Bluechip Stocks to invest in India article.

4) SBI – CMP Rs 514

About the Company

SBI is the largest Indian Bank with 1/4th market share. It serves over 45 crore customers through its vast network of over 22,000 branches, 62617 ATMs/ADWMs, 71,968 BC outlets.

Financial Performance

Its revenues grew from Rs 228,970 Crores in FY18 to Rs 289,972 Crores in FY22.

Its margins grew from loss of Rs 4,177 Crores in FY18 to profit of Rs 43,775 Crores in FY22.

Positive Factors in the company

Strong revenue growth in the last 5 years

Strong profit growth in the last 5 years

Zero promoter pledge

Book value per share is increasing in the last 2 years

FII and FPIs are increasing their stake in the company

Strong momentum in share price in short term, medium term and long term

Brokerages upgraded their ratings with target price in recent times

Negative Factors in this company

Company with high debt

Company not able to generate net cash

High interest payments compared to earnings

Rising other income with low operating income

Share Price Performance

1 year – 22%

3 years – 44%

5 years – 76%

You may like: 10 Best Dividend Yield Stocks to invest in 2022 (6% to 10%)

5) Adani Ports – CMP Rs 754

About the Company

Adani Ports and Special Economic Zone Limited formerly known as Mundra Port and Special Economic Zone Limited, is India’s largest private multi-port operator. APSEZ represents a large network of ports with India’s largest SEZ at Mundra.

Financial Performance

Its revenues grew from Rs 11,322 Crores in FY18 to Rs 15,934 Crores in FY22.

Its margins grew from Rs 3,689 Crores in FY18 to profit of Rs 4,602 Crores in FY22.

Positive Factors in the company

Strong revenue growth in the last 5 years

Strong profit growth in the last 5 years

Promoter increasing share holding quarter on quarter

Book value per share is increasing in the last 2 years

Strong momentum in share price in short term, medium term and long term

Negative Factors in this company

Mutual fund houses has reduced their share holding in recent times

Recent results show declining profits

Share Price Performance

1 year – 12%

3 years – 86%

5 years – 98%

Disclaimer: This article is for educational purpose only. Investment in stocks are high risk. I keep analysing various stocks to personally invest in them. I am already investing in some of the above stocks and would add them in future too. Please consult your financial advisor before investing in any of these stocks.

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Suresh KP

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