NTPC vs NHPC Which Is More Lucrative?

NTPC and NHPC are two prominent power sector companies in India, both listed on the stock market. NTPC, the National Thermal Power Corporation, is primarily involved in thermal power generation, while NHPC, the National Hydroelectric Power Corporation, focuses on hydroelectric power generation. Both companies have a strong presence in the energy sector and have shown consistent growth in recent years. Investors interested in the power sector may consider NTPC and NHPC stocks for potential returns and diversification in their portfolio.

NTPC or NHPC?

When comparing NTPC and NHPC, 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 NTPC and NHPC.

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. NTPC has a dividend yield of 2.44%, while NHPC has a dividend yield of 2.31%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. NTPC reports a 5-year dividend growth of 13.16% year and a payout ratio of 0.00%. On the other hand, NHPC reports a 5-year dividend growth of 5.73% 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 NTPC P/E ratio at 16.22 and NHPC's P/E ratio at 27.86. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. NTPC P/B ratio is 2.13 while NHPC's P/B ratio is 1.82.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, NTPC has seen a 5-year revenue growth of 0.90%, while NHPC's is 0.10%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with NTPC's ROE at 13.54% and NHPC's ROE at 6.92%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹364.40 for NTPC and ₹81.31 for NHPC. Over the past year, NTPC's prices ranged from ₹280.85 to ₹448.45, with a yearly change of 59.68%. NHPC's prices fluctuated between ₹58.00 and ₹118.40, with a yearly change of 104.14%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.