Wole Olajide
The Nigerian stock market last week was bombarded with release of audited reports and corporate actions by listed companies on the Nigerian Exchange. This has triggered renewed buy interests and profit taking by smart investors.
A number of stocks came out with impressive earnings with growth in their top line and bottom line figures. While some companies increased their dividend payout for the year end 2022, some retained the previous dividend and just a few reduced their dividend payout to shareholders.
In the course of last week, the prices of quite a number of stocks was adjusted for dividends (ex-div). This has brought the prices of some stocks downward, thereby creating new BUY opportunities.
The following stocks can be considered for dividend yield and price appreciation:
ZENITH BANK
Zenith Bank declared a final dividend of N2.90 for the period ended 31 December, 2023. With the interim dividend of N0.30 already paid in 30 June 2022, Zenith paid a total of N3.20 for 2022 financial year.
The Financial Institution reported Gross Earnings of N945.554 billion for the 12 months period, up by 23.51% from N765.558 billion reported the previous year.
Profit after tax of N223.91 billion was achieved for the 12 months period, down by 8.44% from N244.558 billion reported in 2021 year end.
Earnings per share of Zenith Bank for the period under review stands at N7.13.
At the share price of N25.85, the P/E ratio of Zenith Bank stands at 3.62x with earnings yield of 27.59%.
A position in Zenith Bank at the current price of N25.85 will give a dividend yield of 11.37%.
Qualification date for the proposed dividend is on 14th April 2023. The Register of Shareholders will be closed on April 17, 2023, while payment date is on May 2, 2023.
Zenith Bank has the capacity to surpass its 52 weeks high of N27 based it’s the increased dividend payout; and it is trading less than its fair value.
Going by its Book Value of N43.92, relative to its current price of N25.85, Zenith Bank is cheap and embedded with growth potentials.
UBA
UBA declared a final dividend of 90 kobo. Ina addition to the already paid interim dividend of 20 kobo, the bank has paid a total of N1.10 for 2022 final year.
UBA has paid an interim dividend of 20 kobo to shareholders.
The financial institution achieved Gross Earnings of N852.863 billion for the 12 months period, up by 29.56% from N658.291 billion achieved the previous year.
Profit after tax (PAT) grew year on year by 43.48% to N170.277 billion from N118.678 billion reported the previous year.
Earnings per share of the Group for the period under review stands at N4.98.
At the share price of N8.35, the P/E ratio of UBA stands at 1.68x with earnings yield of 59.63%.
A position in UBA will give a dividend yield of 10.78%
Qualification date for the proposed dividend is April 14, 2023.
The Bank’s Register of Members will be closed on Monday, April 17, 2023 to enable the Registrars prepare for payment of final dividend.
On Thursday, April 27, 2023, the final dividend will be paid electronically to shareholders whose names appear on the Register of Members as at close of business on Friday, April 14, 2023.
At the share price of N8.35, UBA is trading very close to its 52 weeks high of N8.9. The Bank has capacity to surpass its 52 weeks high of N8.9 as it is trading far below its fair value.
Considering its Book Value of N23.64, relative to its share price of N8.35, UBA is underpriced.
FCMB
FCMB declared a final dividend of
FCMB came out with an impressive FY 2022 result, recording growth in Gross Earnings and Profit after tax. 25 kobo was declared as final dividend, up by 25% from 20 kobo dividend declared the previous year.
At the share price of N4.15, FCMB has touched a high of N5 and a low of N2.92 in the past 52 weeks.
It is trading 17% away from its 52 weeks high of N5. There is uptrend potential in the bank.
Going by its Book Value of N13.64, relative to its share price of N4.21, FCMB is considered cheap.
OKOMU
Okomu Oil Palm Company Plc has proposed a final dividend of N12 per share for the year ended 31 December 2022. This is in addition to the N9 paid as interim dividend amounts to a total of N21 dividend payout for 2022 financial year.
The Company reported a turnover of N59.324 billion, up by 58.64% from N37.395 billion reported the previous year.
Profit after tax for the 12 months period was N16.23 billion, up by 40.66% from N11.539 billion reported the previous year.
Earnings per share of the company stands at N17.02.
At the current share price of N183.5, the P/E ratio of Okomu stands at 10.78x with earnings yield of 9.27%.
A position in Okomu will give dividend yield of 6.54%. In terms of price appreciation, there is uptrend potential of 15.4% relative to its 52 weeks high of N216.9.
ACCESS HOLDINGS
We expect growth in the earnings of Access Holdings and of course improved dividend payout for 2022 year end. It paid 70 kobo as final dividend in 2021 year end. There is likely increase in their dividend payout.
Currently trading at N9, Access is trading 13.88% away from its 52 weeks high of N10.45, which implies an uptrend potential for Access Holdings.
It has the capacity to surpass its 52 weeks high of 10.50 based on the sound fundamentals inherent in company.
With the Book Value of N29.11, Access Holdings is considered very cheap, relative to its current share price of N8.40.
GTCO
GTCO already paid an interim dividend of 30 kobo. We expect GTCO to pay at least a final dividend of N2.70 for 2022 year end.
At the current share price of N25.5, GTCO is trading close to its year high of N27.05.
It also trading 14.03% away from its book value of N29.66.
The release of the company’s audited report for 2022 will go a long way to determine the price direction of the stock.
FBNH
First Bank of Nigeria Holdings is currently trading at N11.10. It has touched a high of N12.4 and a low of N8.2 in the past 52 weeks.
FBNH is trading 10.48% away from its 52 weeks high of N12.4 and has the capacity to surpass it as it is trading below its fair value.
The Holding Company paid a final dividend of 35 kobo in 2021 year end. We expect increased dividend payout for 2022 year end.
With the Book Value of N24.89, relative to its current price of N11.10, FBNH is considered very cheap. A position in First Bank of Nigeria Holdings has great growth potentials.
FIDELITY BANK
Fidelity Bank released an impressive Q4 results for 2022 year end with growth in its topline and bottom line figures.
We expect the bank to release its audited report with dividend declaration.
The Bank already paid interim dividend of 10 kobo in June 2022. A final dividend of 35 kobo was declared in 2021 year end. There is possibility that Fidelity will pay more than 35 kobo as dividend for 2022 year end.
Currently trading at N5.35, the share price of the Bank has touched a high of N6.03 and a low of N2.83 in the past 52 weeks.
It is trading 11.28% away from its 52 weeks high of N6.03, which implies an uptrend potential of about 11% for Fidelity Bank.
With the Book Value of N11.30, relative to its current price of N5.35, Fidelity Bank is considered cheap.