- Interim dividend expectation to drive price growth
Most listed companies on the floor of the Nigerian Exchange have released their Q2 results, except for Banks that are waiting for regulatory approval from CBN. Overall, the results have been impressive as most companies outperform the figures the released during the covid year.
Good results have a way of compensating the share prices of stocks as we saw in Total Nigeria Plc among others, as the price moved from N145 to over N203 in the month of July. The earnings per share of the oil firm increased by 1600%. Those companies that pay interim dividend have not released their half year results like Access, Zenith, UBA and GTCO. The share prices of these Banks is bound to go up based on the expected dividend payout.
The Cement Industry really surprised the market with impressive results. The telecom also surprised the market. When talking of the Nigerian stock market, these four companies: MTN, Airtel, Dangote Cement and BUA Cement constitute 50% of the market capitalisation. If 50% of market capitalisation have improved their earnings, so we can say generally that the Second Quarter earnings for 2021 is better. Airtel’s earnings increased by almost 50%. The same thing with MTN. The same thing with Dangote Cement, BUA Cement and Lafarge. Most of them have more than 25% increase in there earnings per share. This is a good development for the market.
Even though we have seen some reflections of the earnings on the prices of stocks, we are expecting more response in the Cement Industry and Telecom industry. Airtel in the course of last week moved from N615 to N650. MTN has also moved up, it is currently trading at N168.
The insurance sector’s earnings fell below market expectation. Most of them came with marginal growth. Some of them declared negative returns because of the market price of bond. Most of them set their bonds available for sales; and that is marked to market. Most of the bonds are trading below the opening price of January 2021. So that reflected in most of the insurance companies.
We are expecting recovery in the pharmaceuticals. Fidson came out with a very impressive result. May & Baker grew its top line and bottom line figures while Glaxosmithkline declined in top line and bottom line figures.
The market is expecting good results from the industrial sector as some of them are yet to release their results. All of them have resume production as against when the country was on lockdown.
FIDSON HEALTHCARE
Fidson achieved year on year growth in its top line and bottom line figures
A turnover of N12.895 billion was reported for the six months period, up by 57.17% from N8.205 billion reported the previous year.
Profit after tax soared by 137.17% to N1.19 billion from N500.635 million reported the previous year. Earnings per share (EPS) of the Healthcare Company increased to 57 kobo form the EPS of 24 kobo, which translates to 137.17% growth year on year.
At the share price of N6.50, the P.E ratio of Fidson Healthcare Plc stands at 11.13x with earnings yield of 8.98%.
MAY & BAKER
May & Baker reported a turnover of N5.525 billion, from N4.072 billion reported in the second quarter of 2020.
Profit after tax rose to N555.3 million from N438.9 million reported in Q2 2020, which translates to a growth of 26.52% year on year.
The earnings per share (EPS) of the firm appreciated to 32 kobo from the 25 kobo reported in the same period last year. At the share price of N4.70, the P.E ratio of May & Baker stands at 14.60x with earnings yield of 6.85%.
ECOBANK
The Second Quarter result of Ecobank shows significant growth in the Group’s top line and bottom line figures with a profit margin of 14.14%.
Gross Earnings of N442.247 billion was reported for the six months period, up by 12.94% from N391.59 billion achieved the previous year.
Profit after tax grew by 28.88% to N62.55 billion from N48.53 billion reported in Q2 2020.
Earnings per share (EPS) of the Group in Q2 2021 increased by 28.88% to N3.41 from the EPS of N2.65 in Q2 2020
At the share price of N5.40, the P.E ratio of Ecobank stands at 1.58x with earnings yield of 63.13%.
WEMA BANK
Wema Bank grew its topline and bottom figures in Q2 2021, outperforming the achievement of covid year.
Gross Earnings of N41.33 billion was reported for the six months period, up by 8.33% from N38.15 billion reported the previous year.
Profit after tax soared by 148.61% to N3.715 billion from N1.494 billion reported in Q2 2020.
Earnings per share (EPS) of the bank increased to 10 kobo from the EPS of 4 kobo in Q2 2020.
At the share price of N0.87, the P.E ratio of Wema Bank stands at 9.03x with earnings yield of 11.07%.
DANGOTE CEMENT
Dangote Cement achieved year on year growth in its top line and bottom line figures with a profit margin of 27.75%.
A turnover of N690.545 billion was reported for the six months period, up by 44.81% from N476.852 billion reported the previous year.
Profit after grew by 51.91% to N191.630 billion from N126.143 billion reported the previous year.
Earnings per share (EPS) increased to N11.25 form the EPS of N7.40, which translates to 51.91% growth year on year.
At the share price of N248.10, the P.E ratio of Dangote Cement stands at 22.06x with earnings yield of 4.53%.
MTN NIGERIA
MTN declared an interim dividend of N4.55 to its shareholders for Q2 2021.
The Telco giant achieved year on year growth in its top line and bottom line figures as turnover and profit after tax grew by 24.01% and 49.48% respectively.
A turnover of N791.263 billion was reported, up 24.01% from N638.075 billion reported the previous year.
Profit after tax grew by 49.48% to N141.827 billion from N94.879 billion reported in Q2 2020. Profit margin for the period under review was 17.92%.
Earnings per share increased to N6.97 from the EPS of N4.66, which translates to 49.48% growth year on year.
At the share price of N168, the P.E ratio of MTN stands at 24.11x with earnings yield of 4.15%.
OKOMU OIL
Okomu achieved significant year on year growth in its top line and bottom line figures with a profit margin of 40.36%.
A turnover of N23.627 billion was reported for the six months period, up by 74.67% from N13.527 reported the previous year.
Profit after tax soared by 137.98% to N9.536 billion from N4.007 billion reported in Q2 2020.
Earnings per share increased to N10 from N4.20, which translates to 137.98% growth year on year.
At the share price of N110, the P.E ratio of Okomu stands at 11x with earnings yield of 9.09%.
PRESCO
Presco Plc achieved year on year growth in its top line and bottom line figures for Q2 2021 with a profit margin of 47.18%.
A turnover of N21.465 billion was reported, up by 59.49% from N13.458 billion reported the previous year.
Profit after tax grew by 130.68% to N10.167 billion from N4.39 billion reported in Q2 2020.
Earnings per share for the six months period increased to 10.13 from the EPS of N4.39.
At the share price of N71, the P.E ratio of Presco Plc stands at 7.01x with earnings yield of 14.26%.
NIGERIAN BREWERIES
Nigerian Breweries achieved significant growth in its top line and bottom line figures for Q2 2021.
A turnover of N209.26 billion was reported, up by 37.84% from N151.81 billion reported in HY 2020.
Profit after tax appreciated year on year by 38.09% to N7.718 billion from N5.589 billion reported the previous year.
Earnings per share increased to 97 kobo from the EPS of 70 kobo achieved the previous year.
At the share price of 57, the P.E ratio of Nigerian Breweries stands at 59.06x with earnings yield of 1.69%.
BUA CEMENT
BUA Cement achieved year on year growth in its top line and bottom line figures for Q2 2021 with a profit margin of 34.92%.
A turnover of N124.28 billion was reported for the six months period, up by 22.73% from N101.26 billion reported the previous year.
Profit after tax grew by 24.64% to N43.396 billion from N34.819 billion reported in Q2 2020.
Earnings per share (EPS) of the company increased year on year by 24.64% to N1.28 from the EPS of N1.03 the previous year.
At the share price of N68, the P.E ratio of BUA Cement stands at 53.06x with earnings yield of 1.88%.