9 Blue-chip Companies to invest in Nepal in 2023

Are you searching for blue-chip companies to invest in Nepal? Well, it is a pleasure to inform you that we have written a detailed article regarding blue-chip companies and the advantages of investing in 9 blue-chip companies in Nepal. Investing only through IPOs won’t be sufficient to increase your funds. Furthermore, this article will help you choose the blue-chip companies in Nepal to invest in as we have listed top 9 blue-chip companies in Nepal in 2023 based on statistical research, financial analysis, company performance, and other factors. Investing in your early ages in these bluechip companies of Nepal may help you to build your wealth in future. You will definitely enjoy this article.

blue-chip-companies-to-invest-in-nepal

Concept of Blue-Chip Companies

Large, well-established businesses known for their stability and impressive financial performance are known as “blue chip” companies. These businesses are frequently industry leaders and are regarded as some of the most dependable and trustworthy investments. Typically, blue chip companies are listed on significant stock exchanges like the Nepal Stock Exchange (Nepse). They frequently have a long operational history and a solid track record of financial performance, with consistent long-term growth in revenue and profits.

Blue chip businesses typically have strong balance sheets, little debt, and a stable financial situation. They frequently have numerous sources of income and offer a wide variety of goods and services, which helps to lower the risk associated with relying on a single source of revenue.

Investors looking for steady, long-term returns may find investing in blue-chip companies a wise choice. These businesses frequently distribute dividends to shareholders, which can offer a reliable source of income. Additionally, they are typically less volatile than smaller, less well-known businesses, which can reduce the risk of investing in them.

Blue chip companies are not risk-free. It is important to remember that the value of their shares can change depending on the market’s state and the business’s operation. As a result, before investing in a blue chip company, investors should research and weigh the risks.

What do you mean by Blue-chip companies of Nepal?

Large, well-established businesses in Nepal, renowned for their stability and impressive financial performance, are called “blue chip” companies. These businesses are among Nepal’s most dependable and trustworthy investments because they are frequently market leaders in their respective industries.

Blue chip companies of NepalInvesting in blue-chip companies in Nepal may be a good choice for investors looking for steady, long-term returns. These businesses frequently distribute dividends to shareholders, which can offer a reliable source of income. Additionally, they are typically less volatile than smaller, less well-known businesses, which can reduce the risk of investing in them.

(Also read: Common terms used in the stock market)

Nepal’s blue-chip companies include the nation’s largest and most financially secure corporations, such as Nepal Telecom*, Nepal Bank Limited*, Nepal Electricity Authority*, etc. Blue-chip companies are not risk-free, it should be noted, as the value of their shares can change depending on the state of the market and the company’s performance. As a result, before investing in a blue chip company in Nepal, investors should perform their due diligence and weigh the risks.

How are blue-chip companies selected?

There are several ways in which blue-chip companies can be selected, including:

a. Stock exchanges: There are designated lists of blue chip companies on many stock exchanges. The largest and most financially stable companies are usually included on these lists, which are typically based on the size and financial performance of the companies.

b. Industry analysts: Based on their financial results and position as leaders in their respective industries, industry analysts and research companies may also identify blue chip companies. These businesses are frequently regarded as some of the most dependable and trustworthy investments in their respective industries.

c. Mutual fund managers: According to their financial performance and stability, mutual fund managers and other investment experts may also recognize blue chip companies. Typically, these businesses are incorporated into mutual fund portfolios to diversify risk and offer steady, long-term returns.

d. Economists: When choosing blue chip companies, economists may consider several factors. Financial performance, market capitalization, statistics, and industry leadership are a few examples of these standards. When choosing blue chip companies, economists consider the company’s financial performance. This could include figures for sales, earnings, and earnings per share. Strong financial performance is typically associated with more stable and reliable businesses that make good investments.

When economists choose blue chip companies, the total value of a company’s outstanding shares, or market capitalization, may also be considered. Large market capitalizations are frequently associated with more established and financially secure companies. When choosing blue chip companies, economists consider a company’s status as a leader in its sector. Leaders in their respective industries are typically regarded as more trustworthy and reliable investments. To list stocks as blue chip companies, they also use several statistical tools to analyze their characteristics.

Top 10 reasons to invest in blue-chip companies of Nepal

These are the major reasons why we should invest in blue-chip companies in Nepal:

  1. Strong financial performance: Bluechip firms in Nepal are well known for their solid financial standing, with long-term increases in revenue and profits. They may therefore be attractive investments for those seeking stable, long-term returns.
  2. Low risk: Bluechip companies typically have strong balance sheets, little debt, and a stable financial situation. Compared to smaller, less established companies, this may make them less risky investments.
  3. Diverse revenue streams: Bluechip companies frequently have various products or services and revenue streams, which can help lower the risk of relying on a single source of income.
  4. Industry leadership: With a significant market presence and a reputation for providing high-quality goods or services, blue chip companies are frequently leaders in their respective industries.
  5. Stable dividends: Many blue-chip companies distribute dividends to shareholders, giving investors a consistent source of income.
  6. Brand recognition: Bluechip companies frequently have a strong reputation and brand recognition, which can boost investor trust in the business.
  7. Strong management: Bluechip companies typically have strong and capable executive teams. This may contribute to the company’s long-term success.
  8. Good investment track record: Blue-chip businesses frequently have a strong track record, consistent revenue, and profit growth over time. Long-term investors may find them to be attractive investments because of this.
  9. Strong investor support: Bluechip companies typically have many shareholders, a high level of liquidity, and strong investor support. Investors may find it simpler to purchase and sell company shares.
  10. Potential for capital appreciation: Bluechip companies frequently have the possibility of capital appreciation because their share prices can rise over time due to the company’s strong financial performance and expansion.

List of Blue-Chip Companies in Nepal

Here we have compiled a list of blue-chip companies in Nepal to help you break down the tiresome research and help you invest in the Nepalese stock market.

1. Nabil Bank Limited (NABIL)

Dividend History

Calculations on the basis of Bonus Shares only

Number of Years 10
Sum of Bonus Shares% 244.6
Mean (Average) 24.46
Median 27.5
Mode 30, appeared 3 times
Highest Bonus Share 33.6
Lowest Bonus Share 12
Range 21.6
Geometric Mean 22.94696258
Standard Deviation 7.896480229
Variance 62.3544
Sample Standard Deviation 8.323621007
Sample Variance 69.28266667

Calculations on the basis of Cash Dividend plus Bonus Shares (Total Dividend)

Number of Years 10
Sum 431.1
Mean (Average) 43.11
Median 37.42
Mode 34, 65, each appeared 2 times
Highest total Dividend 65
Lowest total Dividend 30
Range 35
Geometric Mean 41.626942
Standard Deviation 12.04463449
Variance 145.07322
Sample Standard Deviation 12.69615952
Sample Variance 161.1924667

2. Chhimek Laghubitta Bittiya Sanstha Limited (CBBL)

Dividend History

Calculations on the basis of Bonus Shares only

Number of Years 10
Sum 287.24
Mean (Average) 28.724
Median 27.06
Mode 40, appeared 2 times
Highest Bonus Share 40
Lowest Bonus Share 18
Range 22
Geometric Mean 27.72452917
Standard Deviation 7.560804455
Variance 57.165764
Sample Standard Deviation 7.969787673
Sample Variance 63.51751556

Calculations on the basis of Cash Dividend plus Bonus Shares (Total Dividend)

Number of Years 10
Sum 429.08
Mean (Average) 42.908
Median 44.67
Mode 45, 52.7, each appeared 2 times
Highest total Dividend 52.7
Lowest total Dividend 29
Range 23.7
Geometric Mean 42.13202851
Standard Deviation 7.74619881
Variance 60.003596
Sample Standard Deviation 8.165210482
Sample Variance 66.67066222

3. Sanakisan Bikas Laghubitta Bittiya Sanstha Limited (SKBBL)

Dividend History

Calculations on the basis of Bonus Shares only

Number of Years 10
Sum 218.25
Mean (Average) 21.825
Median 25
Mode 25.00, appeared 6 times
Highest Bonus Share 27.25
Lowest Bonus Share 0
Range 27.25
Geometric Mean 0
Standard Deviation 7.938867992
Variance 63.025625
Sample Standard Deviation 8.368301633
Sample Variance 70.02847222

Calculations on the basis of Cash Dividend plus Bonus Shares (Total Dividend)

Number of Years 10
Sum 256.04
Mean (Average) 25.604
Median 26.32
Mode 26.32, appeared 4 times
Highest total Dividend 28.68
Lowest total Dividend 15.78
Range 12.9
Geometric Mean 25.31900898
Standard Deviation 3.356150175
Variance 11.263744
Sample Standard Deviation 3.537692908
Sample Variance 12.51527111

4. Nirdhan Utthan Laghubitta Bittiya Sanstha Limited (NUBL)

Dividend History

Calculations on the basis of Bonus Shares only

Number of Years 10
Sum 301.98
Mean (Average) 30.198
Median 22.5
Mode 20.00, appeared 2 times
Highest Bonus Share 66.67
Lowest Bonus Share 13
Range 53.67
Geometric Mean 26.77964539
Standard Deviation 15.91654158
Variance 253.336296
Sample Standard Deviation 16.77750796
Sample Variance 281.4847733

Calculations on the basis of Cash Dividend plus Bonus Shares (Total Dividend)

Number of Years 10
Sum 405.78
Mean (Average) 40.578
Median 36.055
Mode 31.58, appeared 2 times
Highest total Dividend 80.71
Lowest total Dividend 13.68
Range 67.03
Geometric Mean 36.14169625
Standard Deviation 19.00762731
Variance 361.289896
Sample Standard Deviation 20.03579841
Sample Variance 401.4332178

5. Butwal Power Company Limited (BPCL)

Dividend History

Calculations on the basis of Bonus Shares only

Number of Years 10
Sum 52
Mean (Average) 5.2
Median 6
Mode 0.00, 10.00, each appeared 4 times
Highest Bonus Share 10
Lowest Bonus Share 0
Range 10
Geometric Mean 0
Standard Deviation 4.512205669
Variance 20.36
Sample Standard Deviation 4.756282395
Sample Variance 22.62222222

Calculations on the basis of Cash Dividend plus Bonus Shares (Total Dividend)

Number of Years 10
Sum 213.5
Mean (Average) 21.35
Median 20
Mode 20.00, appeared 3 times
Highest total Dividend 28
Lowest total Dividend 12.5
Range 15.5
Geometric Mean 20.67751573
Standard Deviation 5.186761996
Variance 26.9025
Sample Standard Deviation 5.467327196
Sample Variance 29.89166667

6. Salt Trading Corporation (STC)

Dividend History

Calculations on the basis of Bonus Shares only

Number of Years 10
Sum 170
Mean (Average) 17
Median 17.5
Mode 10.00, appeared 4 times
Highest Bonus Share 25
Lowest Bonus Share 10
Range 15
Geometric Mean 15.74697462
Standard Deviation 6.403124237
Variance 41
Sample Standard Deviation 6.749485577
Sample Variance 45.55555556

Calculations on the basis of Cash Dividend plus Bonus Shares (Total Dividend)

Number of Years 10
Sum 170
Mean (Average) 17
Median 17.5
Mode 10.00, appeared 4 times
Highest Bonus Share 25
Lowest Bonus Share 10
Range 15
Geometric Mean 15.74697462
Standard Deviation 6.403124237
Variance 41
Sample Standard Deviation 6.749485577
Sample Variance 45.55555556

7. Citizen Investment Trust (CIT)

Dividend History

Calculations on the basis of Bonus Shares only

Number of Years 10
Sum 250.8
Mean (Average) 25.08
Median 22.03
Mode 22.00, appeared 2 times
Highest Bonus Share 50
Lowest Bonus Share 0
Range 50
Geometric Mean 0
Standard Deviation 13.63977346
Variance 186.04342
Sample Standard Deviation 14.37758363
Sample Variance 206.7149111

Calculations on the basis of Cash Dividend plus Bonus Shares (Total Dividend)

Number of Years 10
Sum 270.58
Mean (Average) 27.058
Median 23.19
Mode 23.16, appeared 2 times
Highest total Dividend 52.63
Lowest total Dividend 0
Range 52.63
Geometric Mean 0
Standard Deviation 13.4459472
Variance 180.793496
Sample Standard Deviation 14.17327281
Sample Variance 200.8816622

8. Himalayan Distillery (HDL)

Dividend History

Calculations on the basis of Bonus Shares only

Number of Years 10
Sum 295
Mean (Average) 29.5
Median 25
Mode 0.00, appeared 5 times
Highest Bonus Share 75
Lowest Bonus Share 0
Range 75
Geometric Mean 0
Standard Deviation 30.20347662
Variance 912.25
Sample Standard Deviation 31.83725979
Sample Variance 1013.611111

Calculations on the basis of Cash Dividend plus Bonus Shares (Total Dividend)

Number of Years 10
Sum 535.25
Mean (Average) 53.525
Median 45.525
Mode 70.00, 100.00, 21.05, 20.00, each appeared 2 times
Highest total Dividend 102.63
Lowest total Dividend 10.52
Range 92.11
Geometric Mean 39.555332
Standard Deviation 36.71584951
Variance 1348.053605
Sample Standard Deviation 38.70190356
Sample Variance 1497.837339

9. Shikhar Insurance Company Limited (SICL)

Dividend History

Calculations on the basis of Bonus Shares only

Number of Years 10
Sum 233.53
Mean (Average) 23.353
Median 25.88
Mode 0, 29.00, each appeared 2 times
Highest Bonus Share 60
Lowest Bonus Share 0
Range 60
Geometric Mean 0
Standard Deviation 16.13122565
Variance 260.216441
Sample Standard Deviation 17.00380484
Sample Variance 289.1293789

Calculations on the basis of Cash Dividend plus Bonus Shares (Total Dividend)

Number of Years 10
Sum 244.29
Mean (Average) 24.429
Median 27.13
Mode 0.00, appeared 2 times
Highest total Dividend 63.16
Lowest total Dividend 0
Range 63.16
Geometric Mean 0
Standard Deviation 16.93358524
Variance 286.746309
Sample Standard Deviation 17.8495661
Sample Variance 318.60701

What tools and statistics have been used to select these blue-chip companies in Nepal?

Some econometric tools and statistical tools that have been used to select the lists mentioned above of blue-chip companies in Nepal include:

  1. Financial ratios: Financial ratios have been used to assess a company’s financial performance and stability, such as the price-to-earnings ratio (P/E ratio) and the debt-to-equity ratio (D/E ratio). Strong financial ratios are typically associated with more stable and reliable businesses that make good investments.
  2. Correlation analysis: The relationship between a company’s stock price and other factors, such as economic indicators or industry trends, has been investigated using correlation analysis. Strong correlations between companies may indicate more reliable investments.
  3. Time series analysis: The financial performance of the companies over time, including trends in revenue, profits, and share price, has also been examined using time series analysis. Businesses with a proven track record of financial success may be considered safer investments.
  4. Regression analysis: The relationship between a company’s stock price and other factors, such as economic indicators or industry trends, was also examined using regression analysis. Strong correlations between a company’s performance and these factors may indicate more reliable investments.

“It is necessary to remember that these statistical and econometric tools only represent a portion of the evaluation of a company’s potential as an investment. Before choosing to invest in NEPSE, investors should also consider other factors, such as the company’s management, its products or services, and the industry outlook.”