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GAIL (India) Ltd (GAILF) is an Indian natural gas processing and distribution company of which the Government of India owns a majority of shares.

GAIL India's core business is the sale and transmission of both natural gas and a variety of LPGs, or liquefied petroleum gases. The company operations have 6 segments: (1) Natural Gas Transmission; (2) LPG Transmission; (3) Natural Gas Trading/Marketing; (4) Petrochemicals; (5) LPG and Other Liquid Hydrocarbon;  (6) City Gas and others.

The vast majority of revenue is from its Natural Gas Trading/Marketing segment.

Further, the company engages in the chartering of LNG vessels. The company owns and operates approximately 14,500 km of natural gas pipeline.

GAIL (India) Limited was incorporated in 1984 and is based in New Delhi, India.

Three key data points gauge GAIL (India) Ltd, or any dividend-paying firm.

They are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.
 

GAILF Price

Over the past year, GAILF share price increased about 7.5% from $7.38 to $7.95 as of Wednesday’s market close.

If GAIL India’s stock trades in the range of $7.00 to $10.00 this next year, its recent $7.93 share price might get up to $9.00 by next year. Of course, GIAILFs price could drop about the same $1.07 amount, or more.

My upside estimate of $1.07 is $0.05 over the average annual price increase in GAILF stock over the past 3 years.
 

GAILF Dividend

GAILF’s recent $0.29 semi-annual variable dividend paid April 19th to shareholders of record March 20th equates to $0.34 annually and throws a yield of 4.3% as of Wednesday’s closing price.
 

GAILF Returns

Adding the $0.34 estimated annual dividend to the GAIL (India) Ltd estimated $1.07 price upside, reveals a $1.41 potential gross gain per share for the coming year.

At Wednesday’s $7.93 closing price, a little under $1000 would buy 126 shares.

A $10 broker fee (if charged), paid half at purchase and half at the sale, might cost us about $0.08 per share.

Subtracting that maybe $0.08 brokerage cost from my estimated $1.41 gross gain per share makes a net gain amounting to $1.33 X 126 shares = $167.58 for a 12% net gain.

This may be the time to pounce on GAILF. But beware, its dividend is variable and its price is slow to change, and   $6.40 under the stock’s all-time $14.33 high posted May 26, 2009.

The foregoing article is based on past history of GAIL (India) Ltd. The only accurate measure of future performance is from active investment in the company.

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