Sterling Bank, Mutual Benefits, NPF Microfinance Bank top stock pick this week

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.

Nigerian stocks advanced strongly last, with the benchmark equity index rising by 6.6 per cent, driven by increased investors’ interest in oil & gas stocks. The market has so far returned 39.6 per cent this year.

“Dividend payments and upcoming qualification dates are expected to remain key catalysts, driving sustained positioning in yield-attractive stocks—particularly within the banking space,” said analysts at investment bank Meristem Securities in their outlook early in the week.

“In addition, the recent reclassification of Nigeria within the FTSE frontier market index is expected to further strengthen investors’ confidence,” they added.

PREMIUM TIMES has assembled some stocks with sound fundamentals, adopting rigorous approaches to save you the risk of picking equities at random for investment.

The pick, a product of an analytical market watch, offers a guide to entering the market and taking strategic positions, with the expectation that selected stocks will record reasonable price appreciation 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.

Sterling Bank tops this week’s list on the basis of its strong fundamentals and for trading below its intrinsic value.

The net profit ratio (NPR) of the lender is 16.5 per cent, while the price-to-earnings (PE) ratio is 4.7x. Its return on equity (ROE) is 18.5.

Mutual Benefits appears on the pick on the basis of its currently robust fundamentals and for trading below its underlying value. The NPR of the insurer is 22.2 per cent, while the PE ratio is 4x. The ROE is 30.2.

NPF Microfinance Bank makes the selection for its strong fundamentals. The microlender’s NPR is 15 per cent, while the PE ratio is 12x. Its ROE is 21.

May & Baker makes the cut for its strong fundamentals. The NPR of the pharmaceutical company is 11.7, while the PE ratio is 14x. Its ROE is 32.7.

AIICO makes the pick for its strong fundamentals. The underwriter’s NPR is 8.1 per cent, while the PE ratio is 6.8x. The ROE is 18.8.