Honeywell FlourMills Plc and Northern Flour Mills Plc are among the players in the NGX consumer goods sector, specifically within the food products subsector.
Their share prices have been on impressive rallies so far this year.
Honeywell shares have gained 265% year-to-date topping the consumer goods sector as of October 8, 2025, following an 89.76% gain last year.
Northern Flour Mills shares, on the other hand, have appreciated by 113% year-to-date, after posting a 3.52% loss in 2024.
While both stocks have rewarded investors handsomely, the key question now is whether these rallies are supported by fundamentals and, more importantly, which of the two offers better value and future upside.
An analysis of the financial performance and valuation of both companies provides insight into their operational strength and investment potential.
Financial performance
Honeywell Flour Mills and Northern Nigeria Flour Mills (NNFM) present contrasting narratives of consistency and recovery when reviewing their revenue and profit trajectories.
Revenue performance
Honeywell Flour has maintained solid top-line growth over the past five years (2021–2025), accumulating N955 billion in revenue at a compound annual growth rate (CAGR) of 36%.
- However, in Q1 2026 (ended June 30, 2025), revenue declined by 16% YoY to N67.49 billion, representing about 18% of its 2025 financial year revenue.
- Notably, revenue from the Sagamu facility declined, while the Apapa facility continued to drive sales.
In contrast, Northern Nigeria Flour has shown stronger long-term revenue momentum.
- Though its five-year cumulative revenue was smaller at N101.41 billion, it recorded a faster CAGR of 42%.
- Like Honeywell, NNFM’s Q1 revenue contracted; down 24% YoY to N6.82 billion, roughly 19% of its 2025 full-year revenue.
- Its sales remain driven largely by wheat and maize products.
Profitability trend
Profit performance highlights the divergence between both firms.
Honeywell experienced volatility, with losses in 2022 and 2024 leading to a cumulative loss of N3.91 billion over five years.
The company rebounded in FY 2025, posting N14.56 billion profit after tax, the highest in five years.
It sustained this recovery in Q1, growing profit by 97% YoY to N2.6 billion, about 18% of its 2025 full-year profit.
Northern Nigeria Flour, on the other hand, has maintained a record of consistent profitability, albeit at smaller volumes.
- Over five years, it generated a cumulative N3.69 billion profit, reflecting a CAGR of 123%.
- Q1 2026 profit fell 15% YoY to N296 million, pressured by rising overhead costs.
Overall, both companies reported similar Q1 2026 profit margins of roughly 4%.
Honeywell’s N67.5 billion revenue translated to a 4% net margin, while NNFM’s N6.8 billion revenue produced a comparable margin.
The modest, margin suggests the flour milling business as a low-margin, high-volume industry,
Since both operate at similar margins, investors would look beyond profitability ratios toward valuation and balance sheet strength to decide which stock offers better value or long-term upside.
Balance sheet
The balance sheet highlights key differences in capital structure, asset composition, and shareholder value.
Honeywell Flour Mills reported total assets of N180.66 billion as of June 30, 2025, driven by inventories (N47 billion) and trade receivables (N31.4 billion).
- Total shareholders’ funds stood at N40.24 billion, representing about 22% of total assets, implying an asset-to-equity ratio of roughly 4.5x.
- Total debt amounted to N25.33 billion, about 14% of total assets, indicating a moderately leveraged balance sheet.
In contrast, Northern Nigeria Flour’s total assets expanded by 28% within three months to N39 billion.
- Shareholders’ funds accounted for N9.94 billion, or about 25% of total assets, reflecting a conservative capital base.
- Notably, the company maintained a zero-debt position as of June 30, 2025.
Honeywell exhibits stronger asset scale and growth leverage, which could amplify returns in profitable years but may expose it to short-term liquidity or interest-rate risks if debt costs rise.
Northern Nigeria Flour stands out for its low-risk balance sheet. Its debt-free balance sheet might limit growth scalability.
Valuation
Honeywell Flour Mills is currently valued at N182 billion on the stock market, almost equal to its total assets but much higher than its net assets of N40 billion.
- The share price of N23 gives it a price-to-earnings (P/E) ratio of 10.7x, meaning investors are paying N10.7 for every N1 of profit.
- Compared to its revenue, it trades at a price-to-sales (P/S) ratio of 0.40x, showing the stock priced relative to its size.
Northern Nigeria Flour Mills, on the other hand, has a smaller market capitalization of N16.7 billion below its total assets but above its net assets of N9.94 billion.
- At a share price of N93.65, it trades at a P/E ratio of 9.86x, slightly cheaper than Honeywell’s 10.7x.
- It also trades at 1.7x for its book value and 0.5x for its sales, showing a modest valuation compared to its revenue size.
- Its profit growth over the past five years has been strong, averaging 90% per year.
Which is better valued?
Both companies have grown well.
Northern Nigeria Flour Mills is the cheaper stock based on valuation metrics, trading at lower price-to-earnings and price-to-sales ratios, with a debt-free balance sheet that reflects strong financial discipline.
However, Honeywell Flour Mills justifies its higher valuation probably based on its larger scale, stronger brand, earnings recovery and growth.
An excellent expert observation and reporting. Thanks for this generous market exposition.
Kindly review the dates, especially in the first few paragraphs.(i.e 2025 instead of 2026)