As MTN Nigeria prepares to list on the Nigerian Stock Exchange later this week, the stock is expected to catapult straight into the trillion naira club list. This is an exclusive club made up of stocks that are the most valued in the country.
What’s the Trillion Naira Club or Cap (TNC)? These are companies listed on the Nigerian Stock Exchange with a market capitalization of over one trillion naira. These stocks are thus valued at at least $3 billion plus if you convert it to the dollar.
Stocks in the TNC: They are Dangote Cement Plc (N1.9 trillion), Nestle Plc (N1.2 trillion), and Guaranty Trust Bank Plc (N1.03 trillion). It is important to note that GTB or even Nestle can be booted out of this club if its share price falls below 10% and 20% respectively. But for now, they belong to this revered club.
MTN’s Valuation: Analysts believe MTN might be listed at a share price of N90 and going by its volume of shares of over 20 billion, its market cap could be in the region of N1.8 trillion; just under Dangote Cement‘s valuation. This immediately catapults MTN into the trillion naira club and it is expected to remain there for years to come. We also expect the stock to zoom past Dangote Cement Plc, which currently has the largest quoted stock in Nigeria.
Value Play – At N90 per share MTN‘s dividend yield should fall in the range of 8.8% very much above the 5% dividend yield range posted on the average by most listed stock. Also, the company’s earnings per share (assuming profits of N160 billion this year) is expected to be around N8 per share. This will give it a price-earnings ratio of about 11.2x and relatively cheap when you consider that it grows its profits and earnings ar double-digit growths.