Banks Are Preferred Top Stocks For July

The top stocks for July include Zenith Bank Plc, United Bank for Africa (UBA) Plc, Guaranty Trust Holding Company (GTCO) Plc, and Nascon Allied, giving investors an idea of which stocks to put their money they seek to earn reasonable returns on investment.

In short, nine 0f the 10 companies on the lists are banks, which could be that investors have rekindled their love for an industry that was reeling from policy paralysis.

Of course, the new administration’s transformation policies have had a positive impact on the equity market, but some analysts say sustainability remains an issue.

The NGXASI index has returned 18.96 percent as of June 30, 2023.

The NGX Banking index (the lists of the most liquid and capitalised banks) has gained 52.02 percent so far this year.

Below, we list the top five stocks in each category: value, growth, and momentum. All data below is as of June 23.

Best Value Stocks

Value investing is a factor-based investing strategy that involves picking stocks you believe are trading for less than what they are intrinsically worth, usually measured by the ratio of the stock’s price to one or more fundamental business metrics. A widely accepted value metric is the price-to-earnings (P/E) ratio.

Value investors say that if a business is cheap compared with its intrinsic value (as measured by its P/E ratio, in this case), then the stock price may rise faster than others as the price comes back in line with the worth of the company. These are among the stocks with the lowest 12-month trailing P/E ratio.

UBA Plc

The Pan African lender has the most attractive valuation among its peers with a price to earnings multiples of 2.46. The Bank has been growing operations in 20 African countries, the UK, USA, with a Rep, office in France. It has also commenced full operation in the UAE.

Access Bank Plc

It is undisputedly glaring that the largest lender by total asset and deposits has seen its shares gain 95.29 percent so far this year. Its Retail Banking business has grown consistently across all income lines, driven by strong focus on consumer lending, payments and remittances, digitization of customer journeys, and customer acquisition at scale

FirstBank Holdings

Since billionaire investor Femi Otedola bought majority stake in the bank in the last quarter of 2021, its earnings have been consistently growing, with solid fundamentals. Its shares have gained 56.42 percent so far this year.

Zenith Bank Plc

The lender has a year to date of 42.71 percent, as it continues to surmount macroeconomic headwinds. It has retained its ranking as the Number One Bank in Nigeria by Tier-1 Capital in the 2023 Top 1000 World Banks’ Rankings, published by The Banker Magazine.

GTCO Plc

The Bank’s total asset as of first quarter stood at N6.7 trillion, representing a growth of 4.65 percent over N6.44 trillion posted in the previous year; maintaining a well-structured and diversified Balance sheet across all its Banking and Non-Banking Entities, (Nigeria, Other West Africa, East Africa, United Kingdom, Payments, Pension and Asset Management).

Fat Growing Stocks

These are the top stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-on-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth.

Nascon Allied Industries Plc

Nascon Allied Industries Plc is principally engaged in the processing of raw salt into refined, edible and grade salt. The Company’s additional business lines include vegetable oil, tomato paste and seasoning with production facilities in Lagos State (Apapa and Oregun), Ogun State (Ota), Rivers State (Port Harcourt). Its products are sold through distributors across the country. Its shares have gained 68.47 percent since the start of the year.

Union Bank Plc

Union Bank of Nigeria Plc (the Bank) is a Nigeria-based financial institution. The Bank is primarily involved in investment, corporate, commercial and retail banking. The Bank has four divisions. The lender has a year to date of 61.43 percent.

Stanbic IBTC

Stanbic IBTC Bank Plc is a financial holding company. The Company offers a range of personal, business and commercial banking products.