5 Nigerian blue chip stocks with best yearly returns

Nigeria’s blue-chip stocks also referred to as NSE 30 stocks are known primarily for being the most capitalized Stocks on the Nigerian stock market.

NSE 30 Stocks are favourites of many traditional and institutional investors mainly for their systematic importance in Africa’s biggest economy, low volatility and more consistent return on investment when compared to low or medium capitalized stocks.

These Stocks account for more than 70% of the total equities valuation of the 2020 best-performing stock market in the world. Investors often increase their buying pressure on them largely because they produce dependable earnings and are often known to pay steady dividends.

Notably, the dividend yield on the NSE30 Index at the end of May 2021 stood at around 6.30%.

Stock market experts reveal that the movement of the prices of these stocks most times influences the market performance upsides or downsides, depending on investors’ sentiments.

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 NSE 30 stocks so far in the year.

Lafarge Africa PLC (WAPCO)

The cement conglomerate has defied market expectations amid some headwinds in Nigeria’s real estate sector, by posting strong growth in recurring earnings before interest and taxes in the year 2020 which went up by 30.8% as against the previous year’s result.

Just recently, shareholders of the blue-chip cement brand commended the company for its dividend payout of 100 kobo amid an era of harsh and challenging economic macros.

The Khaled El Dokani-led company posts yearly gains of 87% as the firm affirmed its commitment to deliver superior stakeholder value through innovation, and continuous improvement.

First City Monument Bank

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

The fast-growing tier 2 Nigerian bank in its most recent earnings call 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 powerhouse.

Just recently also, Oikocredit, a Dutch-based cooperative, recently invested about $10 million in debt in the bank, further affirming the bank’s systemic role in providing credit to the unbanked, small and medium scale businesses in Africa’s largest economy.

BUA Cement

The company has recorded impressive growth in recent months by posting an improvement in its revenue and profit in Q1, 2021 despite stiff economic headwinds. The cement company posts a yearly gain of about 69%.

Institutional investors are keying into the highly capitalized stock 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

The top brewery stock in the past month has recorded immense buying pressures as it bounces back into profit territory from two-quarters of losses in its present financial year ending June 2021.

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

Additionally, the stock is 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, underpinned by its robust cash flows.

Dangote Cement Plc

Nigeria’s most valuable stock by market value affirmed its huge footprint on Nigeria’s manufacturing sector by recently approving N272.6 billion as dividend, translating to N16 per share for the year 2020, to its shareholders.

A significant number of investors have held firm to the 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.

The cement giant posts a yearly return of 65.5%.

Disclaimer

Please note that these are opinions and should not be construed as investment recommendations or financial advice by Nairametrics. Kindly consult your financial adviser for a professional advisory service.