The MSCI has announced its latest index review, set to take effect at market close on May 31, 2024. These reviews, which reflect changes in the market value of constituent stocks, often lead to significant trading activity. This time, 42 securities will be added and 121 removed from the all-country world index, marking substantial adjustments in the market landscape.
Among the notable additions to the MSCI emerging markets index is India's Canara Bank (NS:CNBK), set to become one of the three largest inclusions. This inclusion is expected to attract a considerable inflow of institutional funds. Canara Bank, boasting a market capitalization of INR 1,03,224 crore, has been a standout performer over the past year, delivering an impressive 91% return. Investors can also look forward to a dividend payout of INR 3.22 per share in June 2024.
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Canara Bank's robust performance and upcoming index inclusion make it a stock worth watching. However, prudent investors should always consider the fundamental health of their investments. Here, tools like InvestingPro can provide invaluable insights. According to InvestingPro’s financial health score, Canara Bank has earned a score of 3 out of 5. This score is derived from analyzing over 100 fundamental parameters, offering a comprehensive view of the stock's overall health. A score of 2 or below would suggest caution, making Canara Bank's score a reassuring indicator for potential investors.
InvestingPro goes beyond just scoring; it offers features like ProTips, which provide succinct, actionable insights without the need for deep financial analysis. For Canara Bank, ProTips highlights that the bank has raised its dividend for three consecutive years, offers a significant dividend yield, and is projected by analysts to remain profitable this year. Moreover, the bank has maintained profitability over the last twelve months, further solidifying its investment-grade status.
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However, a potential concern is the stock’s current trading price. Canara Bank's fair value is calculated at INR 110.7, while it is trading at INR 114.5, indicating a slight overvaluation. This suggests that buying on dips could be a more strategic approach for potential investors.
In a volatile market where timely and accurate information is crucial, tools like InvestingPro can be a game-changer for investors. By offering detailed financial health scores and bite-sized ProTips, InvestingPro helps investors make informed decisions with ease.
Currently, InvestingPro is available at a limited-time discount of 69%, bringing its cost down to just INR 216 per month, making it an invaluable resource for both novice and seasoned investors. Click here to make a move and solidify your financial journey.
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