The First Quarter of the year will be over this week. In a matter of weeks, Q1 2022 results of listed firms on NGX will start hitting the market. Year to date, the Nigerian stock market has performed excellently well with 9.94% growth; we saw growth in January and February consecutively. The growth is triggered by impressive Q4 2021 earnings. Further to impressive results are improved dividend payout by these companies.
Based on the impressive Q4 2021 results and dividend declarations, a good number of stocks were rewarded with commensurate price appreciation. It is understandable that prices of stocks have started coming down due to obvious reasons. Investors whose target has been met in terms of price appreciation are taking profit. Another reason is that prices of some stocks have been marked down to adjust for dividend. The interesting thing is that, the lower the prices of these stocks, the better as it is creating new entry opportunities.
Experts have projected a positive outlook for the First and Second Quarter year. However the election preparation by political parties will determine the outlook of the market for the rest of the year. How the electioneering process is handled will determine the level of confidence investors will have in the market. Foreign Investors will be on the lookout for the political climate as this will determine their investment decision.
STOCKS TO WATCH
In terms of market share, Access Bank is currently the leader among other Tier 1 Banks in Nigeria as it grew its turnover to N971.885 billion. Next to Access Bank in turnover is Zenith Bank with a market share of N765.558 billion. This is followed by UBA and GTCO with a market share of N658.291 billion and N447.811 billion respectively. This rating is based on the released FY 2021 results of the banks. First Bank is yet to release its FY 2021 reports.
Access Bank grew its Profit after tax, year on year by 51.13% to N160.22 billion from N106.01 billion reported in 2020 year end. Earnings per share grew by 51.13% to N4.51 from the EPS of N2.98 achieved the previous year.
At the share price of N9.95, the P.E ratio of Access Bank stands at 2.21x with earnings yield of 45.30%.
The qualification date for the proposed 70 kobo dividend of Access Bank is on April 19, 2022. There is enough time for those are not yet in the bus to join.
The register of members will be closed on 20th April, 2022. Payment date is on April 28, 2022.
A position in Access Bank at the current price without doubt has uptrend possibilities as the stock is undervalued.
With the Book Value of N29.54, Access Bank is very cheap, relative to its share price of N9.95.
The price of UBA was marked down for dividend last week. It eventually closed at N7.65 on Friday. This is a good entry opportunity for the stock as there is uptrend opportunity for the stock. UBA is very cheap at N7.65 because it is trading far below its book value of N23.53.
UBA grew its topline and bottom line figures for the year under review by 6.90% and 8.72% respectively.
Gross Earnings of N658.291 billion was recorded for the 12 months period, up by 6.90% from N615.772 billion achieved in FY 2020
Profit after tax grew by 8.72% to N118.678 billion from N109.162 billion reported the previous year.
Earnings per share increased year on year by 8.72% to N3.47 from the EPS of N3.19 achieved the previous year.
At the share price of N7.65, the P/E ratio of UBA stands at 2.20x with earnings yield of 45.36%. A position in UBA will give a dividend yield of 9.52%.
Zenith Bank closed on Friday at N26.90 and it will be marked down for dividend on Monday, March 28, 2022. A lower price will create another entry opportunity for the stock.
The group reported Gross Earnings of N765.558 billion, up by 9.92% from N696.45 billion reported the previous year.
Profit after tax of N244.558 billion was achieved for the 12 months period, up by 6.07% from N230.565 billion profit reported in FY 2020.
Earnings per share of the Company stands at N7.79, up by 6.07% from the EPS of N7.34 reported the previous year.
At the share price of N27.10, the P/E ratio of Zenith Bank stands at 3.48x with earnings yield of 28.74%.
With the Book Value of N40.76, Zenith Bank is considered cheap, relative to its share price of N26.90.
FLOUR MILLS OF NIGERIA
Flour Mills will conclude its year-end by 31 March 2022. Based on the impressive results released in its Q3 as at December 2021, Flour Mills is bound to surprise the market with a fantastic Full Year audited report. There is also possibility of improved dividend payout. Smart investors can take position ahead the possibility of good outing for Flour Mills of Nigeria.
At the current share price of N31, Flour Mills has an uptrend potential as it is trading below its Book Value of N45.11.
LAFARGE AFRICA (WAPCO)
The proposed N1 dividend of Lafarge Africa will be marked down for dividend on the 4th of April 2022.
The Company’s FY 2021 result shows significant growth in the company’s top line and bottom line figures. The earnings per share of the company increased year on year by 65.37% to N3.17 from the EPS of N1.91.
After the release of the company’s result, the share price of Lafarge dropped from around N26.95 to N23.85. This is a good entry price for Lafarge as there is uptrend potential for it
In the past 52 weeks, the share price of Lafarge Africa has touched a high of N28.8. It is trading 17.19% away from its 52 weeks high.
At the current share price of N23.85, there is uptrend potential of about 17.19% for the stock, relative to its 52 weeks high of N28.8.