Home / Markets / Stock Markets /  Rakesh Jhunjhunwala portfolio stock gives 3.59% dividend yield. Should you buy?
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Rakesh Jhunjhunwala portfolio: Canara Bank shares are one of the Rakesh Jhunjhunwala stocks in focus these days. This PSU banking stock has remained under consolidation phase after climbing to its 52-week high of 272.80 apiece levels on NSE in February 2022. While announcing its Q4FY22 results, the state-owned bank announced a dividend of 6.50 per equity share in the financial year 2021-22. As Canara Bank share price today is 180.80, the annual dividend yield of the PSU bank for FY22 falls around 3.59 per cent.

According to stock market experts, shareholders of Canara Bank can continue to hold the stock for long term target of 260 as fundamentals of the stock are still strong. However, they advised fresh buyers to wait and buy around 175 levels for the long term target of 260 per share mark.

Speaking on the fundamentals that may fuel Canara Bank shares, Sonam Srivastava, Founder at Wright Research — a SEBI Registered Investment Advisor firm said , "Canara Bank share price has fallen about 9.97% per cent in a week's horizon. Perhaps, various market-macro reasons would justify its falling price, but the banks' fundamentals remain strong. Moreover, a change in its MCLR from 7.30 per cent to 7.35 per cent last week is outlined towards its falling price as its minimum cost of lending has increased by 35 basis points due to regulatory reasons."

On suggestion to fresh investors in regard to this Rakesh Jhunjhunwala portfolio stock, Anuj Gupta, Vice President — Research at IIFL Securities said, "Canara Bank shares have breached the strong support line and support level of 187 and trading below it. Expecting to trade lower to test 175 to 172 levels. 170 would be treated as a next strong support zone where we can see accumulation."

Advising Canara Bank shareholders to hold the stock further, Sonam Srivastava of Wright Research said, "Existing investors are advised to hold on to the stock and can set targets at 260 & above in the next few quarters. This is an excellent time to enter for new investors as the correction is deep, but the fundamentals are resilient."

Rakesh Jhunjhunwala shareholding in Canara Bank

According to Canara Bank shareholding pattern for Q4FY22, Rakesh Jhunjhunwala owns 3,55,97,400 shares or 1.96 per cent stake in the state-owned bank.

Canara Bank has announced a dividend payout to its shareholders for the first time in the past five years. Accordingly, 16th June 2022 i.e. today is the record date for the same. This dividend payout is in sync with the company's stable growth as its bottom line grew about 64.9 per cent YoY to 1,666.2 crore.

Another good sign is its declining NPA which stood at 2.65 per cent as of March 2022 compared to 3.82 per cent a year ago. Moreover, the news of its life insurance business JV that broke out seemed optimistic as it would fetch a higher valuation, and investors need not dilute any stake.

Also, the board of Canara Bank will be meeting on 24th June 2022 to decide & approve capital raising plans for the FY 2022-2023. All these factors would favor the banks' growth, and hence, in the short term, a rise in its stock price ought to happen.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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