Last week, the Nigerian stock market experienced a minor setback, with stocks depreciating by 1.1 percent due to profit-taking actions in some equities that had seen substantial appreciation in recent weeks. Despite this temporary dip, investors still have attractive opportunities in fundamentally sound stocks with low pricing. This article aims to provide insights into potential investment options, taking into account key analytical approaches.
One of the stocks garnering significant attention this week is United Bank For Africa (UBA). UBA has emerged as a top pick for investors, thanks to its recent declaration of an interim dividend per share of N0.50. This dividend marks a remarkable 150 percent increase compared to the payout to shareholders a year ago. The surge in net profit to N378.2 billion for the first half of 2023 has been a key driver behind this generous reward. Investors interested in UBA should take note of the qualification date on September 26 and the payment date on October 6.
UNITED BANK OF AFRICA (UBA)
UBA’s price-to-earnings (PE) ratio currently stands at 1.2x, with an earnings per share (EPS) of N13.8, making it an appealing option for investors seeking robust returns.
ZENITH BANK PLC
Zenith Bank also makes it onto the list of attractive stocks this week. The bank announced an interim dividend of N0.50 per share, a significant increase from the N0.30 declared a year ago. With a 162 percent surge in bottom-line figures for the first half of the year, resulting in an after-tax profit of N291.7 billion, Zenith Bank is poised for growth.
Investors looking to benefit from Zenith Bank’s dividend should ensure they own the bank’s shares by September 22, the qualification date, with payment scheduled for September 29. The bank boasts a PE ratio of 2.6x and an EPS of N12.9, making it an attractive proposition for investors.
Ecobank Transnational Incorporated (ETI) presents another compelling investment opportunity, trading below its intrinsic value. ETI’s current PE ratio is 1.6x, with an EPS of N9.9. Additionally, its price-to-book (PB) ratio of 0.2x is significantly below 1, which is promising for value investors.
Lasaco Assurance joins the list of stocks trading below their real value. With a PE ratio of 2.2x and an EPS of N0.9, Lasaco Assurance offers investors an opportunity to enter the market at an attractive price point.
Learn Africa is also featured as a stock trading substantially below its intrinsic value. The company’s PE ratio currently stands at 3.9x, with an EPS of N0.9, making it a potential choice for investors seeking undervalued assets.
Lastly, Axa Mansard is highlighted for trading below its real value. The insurer’s PE ratio is presently 2.5x, with an EPS of N1.6.
Note: It’s important to note that this article does not constitute a buy, sell, or hold recommendation but serves as a stock investment guide. It is advisable to consult with a financial advisor before making any investment decisions.
In the coming week, investors will also be closely monitoring the earnings reports of companies like Access Holding, as these reports could influence the direction of the market. In a market where valuations have surged, these fundamentally sound stocks offer a strategic opportunity for investors to potentially gain value in the short term.