Here Are Nigeria's Best-Performing Blue-Chip Companies

Nigerian blue-chip (NSE 30) stocks are popular for being the most capitalized stock assets on the Nigerian stock market. 

In 2020, these stocks accounted for more than 70 percent of the total equities valuation of the Nigerian stock market — the same market was the world's best-performing stock market of the year.

Their importance to the economy, coupled with their relatively low volatility and consistent returns have made them more preferable than low or medium capitalized stocks for many investors. These companies are also usually known to be more dependable when it comes to paying dividends, so investors keep making big bets on them.

It is worthy of note that the movement of these stocks play a substantial role in the overall performance of the markets. The dividend yield on the NSE30 Index at the end of May 2021 stood at around 6.30 percent.

The elite list at the time of filing this report has collectively posted yearly gains of about 46%, as investors depend on them more often for surviving economic downturns and operating profitably. This is unsurprisingly why many of them have a record of stable and reliable growth.

Here’s a look at the top five best-performing blue-chip stocks so far in the year:

Lafarge Africa Plc

While the country's real estate sector has been grappling with severe headwinds, the Khaled El Dokani-led conglomerate has defied a lot of negative expectations by posting strong growth in recurring earnings before interest and taxes in the year 2020 which went up by 30.8 percent as against the previous year’s result.

Just recently, Lafarge's shareholders commended the company for its dividend payout of 100 kobo amid an era of harsh and challenging economic macros.

The blue-chip cement company posts yearly gains of 87 percent as the firm affirmed its commitment to deliver superior stakeholder value through innovation, and continuous improvement.

First City Monument Bank (FCMB)

This fast-growing tier-2 Nigerian bank posts a yearly return of 80% to its shareholders with recent price patterns showing no sign of stalling its bullish momentum.  A recent report revealed that the company unanimously approved the payment of a dividend of N2.97 billion, translating to 15 kobo per ordinary share for 2020.

In its most recent earnings call, FCMB disclosed that it remains resolute in the face of challenges posed by the resurging COVID-19 pandemic. The most recent financial results have also affirmed customers’ confidence in the Ladi Balogun-led financial institution.

The bank also recently received about $10 million debt investment from Dutch-based cooperative Oikocredit.

BUA Cement

This company has recorded impressive growth in recent months, with revenue and profit improving in the first quarter of this year despite unfavourable economic conditions. The company now posts a yearly gain of 69 percent.

BUA Cement is gaining more interest from both individual and institutional investors as market commentators anticipate the company’s total cement production capacity to reach 20 million metric tons per annum upon completion of its Sokoto cement plant and an additional 3 lines of 9 million metric tons total capacity in Edo, Adamawa and Sokoto states, in three years’ time.#

Guinness Nigeria Plc

One of Nigeria's largest breweries, Guinness has also been a leading consumer good stock in the past month, bouncing back from two-quarter losses into profit territory as it approaches the end of its financial year this month.

Guinness Nigeria Plc posts a yearly return of 66 percent, with recent price action showing room for more upsides. Guinness Nigeria sales revenue is looking up for the first time in 3 years.

Additionally, its robust cash flows has the stock all fired up with GCR Ratings upgrading the long-term and short-term Issuer ratings on the NSE30 Stock to AA-(NG) and A1+(NG) respectively, with the outlook accorded as stable.

Dangote Cement Plc

Being Nigeria's most valuable stock by market capitalization, Dangote Cement Plc affirmed its place in the country's manufacturing sector when it recently approved N272.6 billion as dividend, translating to N16 per share for the year 2020, to its shareholders. The cement giant posts a yearly return of 65.5 percent.

Quite a number of investors have held firm to this stock for attaining a trillion-naira revenue growth, amid economic challenges facing the $514 billion giant. Its chairman, Aliko Dangote, Africa’s richest man reinforced the company’s commitment to maximizing shareholder value.

 

 

Disclaimer: This should not be considered as financial advice. Please ensure you consult your financial adviser for professional counsel.