Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home Opinions Blurb

Analysis: MTN, buyer beware or aware? 

Blurb Team @Nairametrics by Blurb Team @Nairametrics
November 12, 2019
in Blurb, Spotlight
MTN Nigeria share price, MTN Nigeria court case, MTN Nigeria cyber attack, MTN Nigeria loses N700 million to cyber attack, MTN Nigeria denies cyber attack, MTN Nigeria financial statement, MTN Nigeria listing, EFCC raid MTN Nigeria, MTN Nigeria list on NSE, Nigerian Stock Exchange, MTN AI for Mobile Money

MTN Nigeria executives on the day of listing at the Nigerian Stock Exchange

Share on FacebookShare on TwitterShare on Linkedin

MTN share price fell to N122 on Friday — the lowest since May 21, 2019, two days after its famed listing. Its allure seems to have waned since it hit its peak of N159 per share earlier in the year when it newly listed. In the stock market, a lot can change in a year, not to talk of 6 months. But when stocks fall, it’s a signal for whether to buy or sell.  

Nigeria’s largest mobile telecommunication firm released its 2019 9 months result showing that revenues rose 12% year on year to N856.4 billion. Pre-tax profits also rose from 28.9% to N148.3 billion, delivering an astonishing return on equity of 164%.  

RelatedPosts

By the numbers: Comparing NNPC with Saudi Aramco

Why Bitcoin is losing the war against inflation

While you salivate on that, the company also generated an impressive gross operating cash flow of N439 billion, or the more investor preferred EBITDA of N460 billion. Earnings per share printed N7.29 up 29% year on year and now double the N3.57 it printed in the entire 2018.  

Enough of the platitudes, after all its share price still fell. Why are investors hesitant to value MTN shares higher despite its profitable growth and cash minting abilities? One may have to look towards its EBITDA multiple to understand why. At a current EBIDTA of N460. 1 billion (N613 billion annualized) and enterprise value of N3.263 trillion, MTN EBITDA/Market Value multiple is at an impressive 5.3x. This multiple has already breached the 5.4x ascribed to its African and emerging market peers and could perhaps be why the share price is not rallying as much as expected. 

MTN’s EBITDA multiple Calculation – Nairametrics Research 

 MTN’s apparent illiquidity is also a major snag. The stock trades 30-day average volume traded is about 1.9 million, keeping it out of the reach of not just retail investors but institutional investors. Still significant in value considering its share price, but some banks trade billions daily in value. Foreign investors will have to scramble for the shares even if they found it very attractive; an uncanny proposition when you have cheaper liquid stocks with a higher propensity to deliver capital gains.  

But is there an upside? If you assume that MTN is on track to deliver an earnings per share of at least N10, then investors with an affinity towards dividends and long-term fundamentals may find the stock a worthy investment. MTN earnings per share of N7.26 annualized assumes a price to earnings multiple of 12.5x at the current price of N122. Still pricey when you compare to GTB and Zenith and 4.62x and 2.69x respectively. MTN’s dividend yield is also a paltry 2.39% and annualized earnings yield (the actual return on equity for new investors) just 8%.  

Either way, it appears that MTN has got limited upsides for a retail investor, except you wish to hold for the long term. But you never know, especially in this stock market where demand and supply seldom obey common sense. Should you decide to buy, be aware of the potential of this stock to deliver on results consistently on the short to medium term. Its market moat cannot be overemphasized. However, beware of its obvious pitfalls, particularly with delivering quick astronomical capital gains.  

Related

Tags: 2019 9 Months ResultsBottom LineMTN

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Hot forex
Cornerstone
Mega Millions
Polaris Bank
Access Bank
Bankers Committee
First bank


FCMB
Ikeja Electrics




    Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

    Recent News

    • Customs seizes N1.3bn worth of smuggled goods in Ogun between May and June
    • Buhari Confers GCON title on Justice Tanko, ex-CJN
    • Share price of company that filed for Bankruptcy rallies over 300% in a week

    Follow us on social media:

    Recent News

    Customs seizes N1.3bn worth of smuggled goods in Ogun between May and June

    Customs seizes N1.3bn worth of smuggled goods in Ogun between May and June

    June 27, 2022
    Justice Ibrahim Tanko Mohammed

    Buhari Confers GCON title on Justice Tanko, ex-CJN

    June 27, 2022
    • ABOUT US
    • CONTACT US
    • PRODUCTS
    • ANDROID APP
    • iOS APP
    • DISCLAIMER
    • CAREERS
    • PRIVACY POLICY

    © 2022 Nairametrics

    No Result
    View All Result
    • Home
    • Exclusives
      • Financial Analysis
      • Corporate Stories
      • Interviews
      • Investigations
      • Metrics
    • Markets
      • Cryptos
      • Commodities
      • Equities
        • Dividends
        • Stock Market
      • Fixed Income
      • Market Views
      • Securities
    • Industries
      • Company News
      • Consumer Goods
      • Content Partners
      • Corporate deals
      • Corporate Press Releases
      • Energy
      • Entertainment
      • Financial Services
      • Hospitality & Travel
      • Manufacturing
      • Real Estate and Construction
      • Tech News
    • Economy
      • Get Data
      • Macro-Economic News
      • Research Analysis
    • Business News
    • Financial Literacy
      • Career tips
      • Personal Finance
    • Lifestyle
      • Billionaire Watch
      • Profiles
    • Opinions
      • Blurb
      • Op-Eds

    © 2022 Nairametrics

    Social Media Auto Publish Powered By : XYZScripts.com