BUA Foods is Most Promising Consumer Good Stock

BUA Foods Nigeria Plc has remained impervious to the foreign currency volatility threatening the existence of consumer goods firms who have booked huge foreign exchange revaluation losses, making the company the cream of the crop.

It is glaring that BUA Food is the best consumer goods stocks as it has delivered stronger profit margins, solid revenue growth, robust cash flows, and delivered higher returns to shareholders.

To put in proper context, the company is going to pay a bumper dividend to shareholders compared to most peer rivals who have fallen off the cliff.

Interestingly, it is the most profitable company in the industry, leapfrogging Nestle Nigeria. BUA Foods posted a net income or profit after tax (PAT) of N105.61 billion as at September 2023.

That compares with Nascon Allied’s profit of N11 billion; Guinness Nigeria (N2.59 billion), and Unilever Nigeria (N1.67 billion).

Nestle Nigeria, Cadbury, Dangote Sugar, Nigerian Breweries, International Breweries, and Flour Mills of Nigeria posted net losses or losses after tax of (N43.06 billion), (N10.24 billion), (N27.02 billion), (N56.82 billion), (N28.55 billion), and Flour Mills, (N8.52 billion).

BUA Foods also recorded the largest expansion at the top lines among peers, which validates its aggressive sales strategy to average reduce cost per ton.

BUA Foods’ sales surged by 80.94 percent as at September 2023. That compares with Nascon Allied’s revenue growth of (45.57 percent); Cadbury, (39.16 percent); Flour Mills, (33.87 percent); Unilever Nigeria, (25.95 percent); Cadbury, (18.92 percent); International Breweries, (14.55 percent); Guinness Nigeria, (12.65 percent), and Dangote Sugar (7.41 percent).

Despite bad roads or deteriorating infrastructure, BUA Food is able to ship its goods across the country as the company is exploiting additional commercialized capacities of Flour, Rice and Pasta to capture more market demands

The company generated more profit from core business than peer rivals.BUA Foods recorded earnings before interest and taxation (EBIT) of 29.92 percent as at September 2023.

That compares with Nascon Allied’s EBIT of 28.27 percent; Nestle Nigeria, (23.09 percent); Cadbury, (16.30 percent); Dangote Sugar (18.13 percent); Guinness Nigeria (13.23 percent); Nigerian Breweries, (6.88 percent): Flourmills, (2.56 percent); Unilever, (2.12 percent), and International Breweries, (6.05 percent).

The consumer goods giant’s shares have gained 200 percent since the start of the year, outperforming the NGXASI index.

Get More of our proprietary news and analysis as MoneyCentral is now on WhatsApp Channels  Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!