Investors in the stock market invest typically for one of two reasons: They believe that the price will rise and allow them to sell the stock at a profit, or they intend to collect the dividends paid on the stock as investment income.
But there are some stocks that can satisfy both objectives, at least to some extent, but different types of stocks can be classified into one of 3 categories:
- Income Stocks
- Value Stocks
- Growth Stocks
Investors who understand the characteristics of each type of stock can use this knowledge to grow their portfolios more efficiently.
In this blog, we will take you through all three categories of stock and the best stocks in each category you can consider buying. Read On!
Best Stocks to Buy in Each Category in 2023
In this blog, we have composed a list of the Best Stocks in Each Category for 2023.
S.No. | Name of Stocks | Industry |
Income Stocks | ||
1. | Coal India Limited | Mining, Refinery |
2. | Indian Oil Corporation Limited | Energy: Oil and gas |
3. | Power Finance Corporation | Financial Services |
Value Stocks | ||
4. | Sonata Software Limited | Global IT Services |
5. | Avanti Feeds Limited | Aquaculture |
6. | HCL Technologies Limited | Information Technology |
Growth Stocks | ||
7. | Bajaj Finance Limited | Non-Banking Financial Company |
8. | Britannia Industries Limited | Food |
9. | Muthoot Finance Limited | Microfinance |
Factors to Remember Before Investing in the above-mentioned Stocks by Category
- Income Stocks are stable but provide a high dividend yield. The dividend yield in stocks is a financial ratio that tells investors how much a company pays out in dividends each year in relation to its share price.
- Although Income Stocks are less risky and pay frequent dividends, their return will likely be lower than Value and Growth Stocks.
- The stock price of Value Stocks might have dropped due to public perception regarding factors that have little to do with the company’s current operations.
- Growth Companies may currently be growing at a faster rate than the overall markets, and they often devote most of their current revenue toward further expansion.
You may also want to read 6 Different Criteria to Categorize Stocks
Overview of the 3 Best Stocks in Each Category
Income Stocks
The stocks that offer regular and steady income to their investors, usually in the form of dividends, over a period of time with low exposure to risk are known as Income stocks.
1) Coal India Limited
Coal India Limited is an India-based coal mining company. The Company is mainly engaged in mining and production of coal and also operates coal washeries.
The 52-week high/low is the highest and lowest price at which a Coal India stock has traded during that given time period (similar to 1 year) and is considered a technical indicator.
2) Indian Oil Corporation Limited
Indian Oil Corporation Limited is an India-based oil company. The Company's segments include Petroleum Products, Petrochemicals, and Other Business Activities. Its Other Business Activities segment includes gas, oil and gas exploration activities, explosives and cryogenic business, and windmill and solar power generation.
The 52-week high/low is the highest and lowest price at which an IOCL stock has traded during that given time period (similar to 1 year) and is considered a technical indicator.
3) Power Finance Corporation
Power Finance Corporation Limited is an India-based non-banking financial company. The Company is primarily engaged in providing financial assistance to the power sector.
The 52-week high/low is the highest and lowest price at which a Power Finance Corporation Limited stock has traded during that given time period (similar to 1 year) and is considered a technical indicator.
Value Stocks
Undervalued companies can often provide long-term profits for those investors who do their homework correctly. A value stock trades at a price below where it appears it should be based on its financial status and technical trading indicators.
4) Sonata Software Limited
Sonata Software Limited is a global technology company. The Company is primarily engaged in the business of delivering information technology (IT) services and software solutions.
The 52-week high/low is the highest and lowest price at which a Sonata Software stock has traded during that given time period (similar to 1 year) and is considered a technical indicator.
5) Avanti Feeds Limited
Avanti Feeds Limited is an integrated seafood company. Its segments include Shrimp Feed, Processed Shrimp, Power, and Shrimp Hatchery.
The 52-week high/low is the highest and lowest price at which an Avanti Feeds stock has traded during that given time period (similar to 1 year) and is considered a technical indicator.
6) HCL Technologies Limited
HCL Technologies Limited is an India-based technology company. The Company offers its services and products through three business segments: IT and Business Services (TBS), Engineering and R&D Services (ERS), and Products & Platforms (P&P).
The 52-week high/low is the highest and lowest price at which an HCL Technologies stock has traded during that given time period (similar to 1 year) and is considered a technical indicator.
Growth Stocks
Growth Stocks have some common characteristics, although individual investors may tweak the numbers for their own purposes.
As the name implies, growth stocks are the stocks of companies that, by definition are those that have substantial potential for growth in the foreseeable future.
7) Bajaj Finance Limited
Bajaj Finance Limited is an India-based non-banking financial company. The Company's consumer lending products include consumer electronics, furniture, digital products, e-commerce purchases, and daily spending financing.
The 52-week high/low is the highest and lowest price at which a Bajaj Finance stock has traded during that given time period (similar to 1 year) and is considered a technical indicator.
8) Britannia Industries Limited
Britannia Industries Limited is primarily involved in the manufacturing and sale of various food products. Its product portfolio includes biscuits, bread, cakes, rusk, and dairy products, including cheese, beverages, milk, and yoghurt.
The 52-week high/low is the highest and lowest price at which a Britannia Industries stock has traded during that given time period (similar to 1 year) and is considered a technical indicator.
9) Muthoot Finance Limited
Muthoot Finance Limited is an India-based gold financing company. The Company is a non-deposit-taking, non-banking financial company which is engaged primarily in the business of financing.
The 52-week high/low is the highest and lowest price at which a Muthoot Finance stock has traded during that given time period (similar to 1 year) and is considered a technical indicator.
Conclusion
A truly diversified portfolio has all three: Income, Value, and Growth Stocks. If you find only one kind in your holdings, consider the benefits of diversification.
If you are just starting out, plan your investments with a good mix of income, value, and growth stocks.
Happy Investing!
Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.
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Research Analyst - Bavadharini KS
