NHPC vs NTPC Which Is More Promising?

NHPC and NTPC are two prominent players in the Indian power sector and are both listed on the stock exchange. NHPC specializes in hydroelectric power generation, while NTPC is India's largest power utility company, with a diversified portfolio of thermal, hydro, and renewable energy projects. Both companies have strong financials and a proven track record of delivering consistent returns to their shareholders. Investors looking to gain exposure to the booming Indian power sector may consider investing in NHPC and NTPC stocks.

NHPC or NTPC?

When comparing NHPC and NTPC, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between NHPC and NTPC.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. NHPC has a dividend yield of 2.42%, while NTPC has a dividend yield of 2.82%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. NHPC reports a 5-year dividend growth of 5.73% year and a payout ratio of 0.00%. On the other hand, NTPC reports a 5-year dividend growth of 13.16% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with NHPC P/E ratio at 26.57 and NTPC's P/E ratio at 16.36. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. NHPC P/B ratio is 1.74 while NTPC's P/B ratio is 2.15.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, NHPC has seen a 5-year revenue growth of 0.10%, while NTPC's is 0.88%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with NHPC's ROE at 6.92% and NTPC's ROE at 13.54%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹77.26 for NHPC and ₹371.35 for NTPC. Over the past year, NHPC's prices ranged from ₹51.65 to ₹118.40, with a yearly change of 129.24%. NTPC's prices fluctuated between ₹247.30 and ₹448.45, with a yearly change of 81.34%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.