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Mining companies are below 5 year lows
20 Jan 2016
If you are looking for mining companies, consistent dividend payout, limited downside then take a look at such stocks which are below their 5 year low due to recent market correction

Companies such as Coal India, Hindustan Zinc, Gujarat Mineral Development Corporation (GMDC), National Mineral Development Corporation (NMDC) and National Aluminium Company (Nalco) are trading significantly below their 5-year average valuations due to weak commodity prices.

High cash (around 50% of market capitalisation) will limit their downside, and investors with long-term horizon would find these shares attractive for their high dividend paying policies.
If fall in commodities bottoms out sometime later this year (unlikely in the near term) these stocks could offer good returns to their investors.

Unlike metal companies, which have high debt and are seeing losses in the weak commodity environment, mining companies have managed to sustain their profitability and cash flows. All the mining companies mentioned above are debt free and have huge cash on their balance sheets.

Interestingly, after underperforming the benchmark indices - Nifty and Sensex - most of these mining companies have given positive returns in the past one month, when Nifty and Sensex were down by 4%. Government's divestment plans could be an overhang, but the divestments are unlikely to happen at such low prices.