NHPC vs Tata Power Which Is More Profitable?

NHPC and Tata Power are two leading players in the power sector in India. NHPC, a government-owned company, specializes in hydroelectric power generation and has a strong presence in the renewable energy sector. On the other hand, Tata Power is a private player with a diverse portfolio of power generation assets including coal, renewable, and transmission. Both companies have shown resilience and stable performance in the face of industry challenges and regulatory changes, making them attractive investment options for investors.

NHPC or Tata Power?

When comparing NHPC and Tata Power, 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 Tata Power.

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 2.22%, while Tata Power has a dividend yield of 0.47%. 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, Tata Power reports a 5-year dividend growth of 9.00% 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 28.96 and Tata Power's P/E ratio at 36.55. 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 1.89 while Tata Power's P/B ratio is 4.06.

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 Tata Power's is 1.17%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with NHPC's ROE at 6.92% and Tata Power's ROE at 10.54%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹83.16 for NHPC and ₹420.30 for Tata Power. Over the past year, NHPC's prices ranged from ₹58.00 to ₹118.40, with a yearly change of 104.14%. Tata Power's prices fluctuated between ₹312.70 and ₹494.85, with a yearly change of 58.25%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.