STOCKS TO WATCH: Zenith Bank, C & I Leasing, Ecobank top stocks pick this week

Much as the quantity of shares traded fell by half last week, Nigerian stocks were up 0.6 per cent, driven by a bigger interest in financial services stocks.

In a mark of confidence in the prospects the market offers, equities continued to find a solid ground against the pressure that would have diverted a big portion of institutional investors’ capital away into fixed-income assets, taking into account the country’s high monetary policy rate, which has made the latter particularly attractive.

“Given the tremendous mid-long term opportunities in the equities market, fund managers and businesses may begin to entertain mid-long-term (≥6 months) investment objectives, cherry-picking only sound equities with undisputable (or undervalued) fundamentals and ongoing corporate actions (M&As…),” said investment bankers at United Capital.

On the whole, bank stocks hold a notably bright spot for investment among other sectors, considering that such equities are generally undervalued and that the sector has so far this year yielded lower than it did last year.

With Zenith Bank releasing a reasonably strong result recently coupled with the high expectations that the rest of the Big 5 lenders will follow suit, the market is on track to sustain its uptrend in the near term.

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.

Zenith Bank

Zenith Bank tops this week’s pick for declaring an interim dividend of N1 per unit for half-year 2024, twice as much as the cash reward it gave shareholders in the same period of last year.

The top-tier lender’s profit after tax rose by almost twofold to N578 billion within the period.

The price-to-book (PB) ratio of the financial institution is presently 0.4x, while its price-to-earnings (PE) ratio is 1.4x.

C & I Leasing

C & I Leasing makes this week’s list for currently trading significantly below its intrinsic value, brightening its chances of good price appreciation in the future. The company’s PB ratio is 0.1x, while the PE ratio is 6.9x.

Ecobank Transnational Incorporated (ETI)

ETI appears in the pick for currently trading well below its actual value. The PB ratio of the lender is 0.4x at the moment, while the PE ratio is 1.2x.

Prestige Assurance

Prestige Assurance features on this week’s list for currently trading below its real value. The insurer’s present PB ratio is 0.4x, while the PE ratio is 2x.

Ikeja Hotel

Ikeja Hotel makes the cut for currently trading below its real value. The company’s PB ratio is 0.6x, while the PE ratio is 2.6x.

Mutual Benefits Assurance

Mutual Benefits appears on the list for trading significantly below its real value. The underwriter’s PB ratio is 0.6x, while its PE ratio is 2.4x.