This high FCF, high dividend yield company is up by more than 23 per cent in one month

The company is virtually debt-free and generates a good amount of free cash flow per share.

While choosing stocks for long-term investments, various parameters are observed as selection criteria. Free cash flow (FCF) is one parameter that needs to be tracked before including a stock in one’s diversified portfolio. 

One such cash-rich stock reflecting strong free cash flows is Navneet Education Ltd. The company is virtually debt-free and generates a good amount of free cash flow per share. The FCF per share is 10.6 for the company and the EV/FCF is less than 10.  EV/FCF of less than 10 reflects strong cash-free cash flow generation capacity for any company. Trading at Rs 90.55 per share, the company is reflecting a dividend yield of 3.31 per cent. The stock is up by more than 23 per cent in one month alone. 

The company has shown negative sales growth as schools have remained mostly closed in Maharashtra and Gujarat, where the company has a good market share. Now with the economy opening up in both states, the schools are expected to open in July onwards. School opening may revive the fortunes of Navneet Education and as a result, the stock price is reacting positively on the bourses with the expectations that the company can arrest its falling sales figures. 

Navneet Education Limited is an Indian company that is in the business of educational & children's book publishing, scholastic stationery, and non-paper stationery products. It operates in three segments: publication, stationery, and others. Its products are Navneet, Vikas, Gala, and Youva.