Fidelity Bank, UBA, Prestige Assurance top stocks pick this week

Nigerian stocks shed 1 per cent last week, following sell-offs in industrial goods and bank stocks.

“We anticipate a shift in investor sentiment towards the fixed income market, driven by high yields, as the Monetary Policy Committee’s hawkish stance tightens system liquidity and slows equities market activities,” analysts at Meristem Securities had earlier predicted.

Equities have added 30.4 per cent this year, and a number of low-priced stocks with prospects of appreciation are available in the market.

Two stocks announced their strongest interim dividend ever on record during the week, and so have a place in the pick week also because they have fundamentals that make them potential good buys.

PREMIUM TIMES has assembled some stocks with fundamentals and other potential, adopting key analytical approaches to save you the hassle of randomly picking equities for investment.

The selection, a product of analytical market watch, offers a guide to entering the market and taking strategic positions in hopes that equities will increase in value with the passage of time.

This is not a buy, sell or hold recommendation but a stock investment guide. You may need to involve your financial advisor before taking investment decisions.

Fidelity Bank

Fidelity Bank tops this week’s pick for declaring an interim dividend per share of N0.85 per unit for half-year 2024, 240 per cent higher than what it paid shareholders a year ago.

The price-to-book (PB) ratio of the lender is 0.7x; its price-to-earnings (PE) ratio is 3.5x.

United Bank for Africa (UBA)

UBA appears on the list for announcing an interim dividend of N2 per share for half-year 2024, equivalent to four times the cash reward it offered shareholders in the same period of last year. The group’s PB ratio is 0.3x, while its PE ratio is 1.8x.

Prestige Assurance

Prestige Assurance makes this week’s list for trading significantly below its intrinsic value, brightening its chances of good price appreciation in the future. The underwriter’s PB ratio is 0.2x, while the PE ratio is 1.9x.

Cornerstone Insurance

Cornerstone Insurance features on this week’s list for currently trading below its real value. The insurer’s PB ratio is 0.7x, while the PE ratio is 1.5x.

Custodian Investment

Custodian makes the cut for currently trading below its underlying value. The company’s PB ratio is currently 0.8x, while the PE ratio is 2.1x.

Nascon

Nascon appears in the pick for trading close to its lowest price in 52 weeks. Its PB ratio is 2.5x, while the PE ratio is 6.6x.