MoneyCentral expects Dangote Cement’s stock price to double to N1,000 in the medium term as growth is accelerating while valuation has yet to catch up.
Dangote Cement Plc, Africa’s largest producer of the building material just released Half Year (H1) 2025 financial results on Friday (July 25), and there’s a lot to like in them.
In other words we believe the market is currently providing a discount in the share price of Dangote Cement for investors, which will however not stay so for long.
We outline below some of the reasons for the coming rally in Dangote Cement shares.
EPS tracking at N61.48 for Full Year 2025 with a PE ratio cheaper than global peers
Dangote Cement reported profit for the 6-months (H1) period to June 2025 of N520.45 billion, up 174 percent compared to N189.9 billion as at June 2024.
Total Full Year (FY) after tax profit for year 2024 was N503.24 billion, meaning that Dangote Cements profit as at June 2025 had surpassed the FY profit for all of last year.
Earnings Per Share (EPS) for the Half Year period came in at N30.74 per share, up 173% compared to EPS of N11.26 per share as at June 2024.
When annualised for the Full Year, it shows that the current EPS is tracking to close the year at N61.48 per share.
Dangote Cement’s stock price closed trading on Friday at N493 per share for a price to earnings (PE) ratio of 10.02 times earnings, according to Bloomberg data.
Global peers such as Anhui Conch Cement Co Ltd trading in Hong Kong have a PE ratio of 14.25 times earnings while CEMEX of Mexico trades at a PE ratio of 14 times earnings.
The Price-to-Earnings (P/E) ratio is a valuation metric that compares a company’s stock price to its earnings per share (EPS). It indicates how much investors are willing to pay for each dollar/Naira of a company’s earnings.
A higher P/E ratio generally suggests investors are expecting higher future earnings growth.
From a PE ratio perspective it shows Dangote Cement is undervalued compared to global peers.
Slapping a 15 PE multiple on the estimated Full year 2025 annualised EPS of N61.48 per share would give a share price of N922 per share for Dangote Cement.
CEMEX meanwhile had profit margins of 7.7% in Q2, 2025, compared to 9.5% for Anhui Conch and 28.69% for Dangote Cement.
In other words Dangote Cement has more high quality earnings but a lower PE, such a mismatch won’t last for long especially with global investors returning to Nigeria’s capital markets as dollars become more available with the FX issue largely resolved by the Central Bank.
African play beginning to pay off
Dangote Cement’s African play is finally beginning to pay off as the firm recorded profit from its Africa operations, while Pan Africa revenues also rose.
The firm recorded revenue of N2.071 trillion as at June 2025, with 33% of it or N682 billion coming from Pan Africa.
Pan Africa profit came in at N139.9 billion in H1 2025, compared to a loss of N68.5 billion recorded as at June 2024.
Finance income up, Finance costs down
Dangote Cement’s balance sheet is probably one of the healthiest among global peers of cement makers who are notorious for weak balance sheets due to legacy inefficient cement plants as well as high energy costs.
Dangote Cements newer greenfield assets as well as the use of cheaper gas to power plants helps it to better navigate the capital intensive cement manufacturing business.
This can be seen in the Half Year (H1) 2025 period where finance income rose while finance costs fell.
Total Group finance income increased 357 percent year-on-year to N113.25 billion in H1 2025, while finance costs fell by 35% to N216 billion for the period.
Finance income for Dangote Cement for H1 included N67.5 billion in interest income, a sign of healthy cash and near cash holdings.
Dangote Cement’s stock chart consolidating and ready to spring higher
Dangote Cements stock price has gone nowhere in the past more than 1-Year. A sign that is bullish and showing consolidation before an eventual move higher.
A year ago on July 29, 2024 the stock traded at N591 per share and as at July 25, 2025 it closed trading at N493 per share.
Dangote Cement stock is up 2.97 percent year to date (July 25, 2025), compared to the 30.63 percent gain in the NGX all share index of Nigerian stocks.
This market underperformance is likely to be reversed soon.
GDP rebasing, Warren Buffett and stock valuation
A 15 Price to Earnings (PE) ratio multiple that is put on the estimated Full year 2025 annualised earnings per share (EPS) of N61.48 for Dangote Cement would give it a share price of N922 per share.
This would imply a market capitalisation of N15.55 trillion.
Nigeria’s GDP was recently rebased to show an economy 30% larger with nominal GDP of N372 trillion as at December 2024.
We applied the “Buffett Indicator,” popularized by Warren Buffett, a valuation metric that compares the total market capitalization of a country’s publicly traded stocks to its Gross Domestic Product (GDP).
This ratio, also known as the market capitalization-to-GDP ratio, is used to assess whether a stock market is overvalued, undervalued, or fairly valued.
In this case we apply it to Dangote Cement specifically to gauge if a N15 trillion – N16 trillion valuation is overtly outsized compared to the economy as a whole.
Dangote Cement’s stock valuation (of N15.55 trillion assuming a rally to N922 per share) would be about 4.1 percent of GDP which is conservative, especially with sales that could top N4 trillion this year.
The company recorded N3.58 trillion in revenues in 2024, representing a 62.2 per cent year-on-year growth.
Dividend growth
Investors in Dangote Cement should expect dividend growth this year which should help drive share price higher.
Shareholders approved a dividend payout of N30 per share to all investors in 2024, totaling N502.6 billion.
With Half Year profit already hitting N520 billion (higher than the total dividends paid in 2024), there are chances that 2025 dividends will increase from 2024 levels.
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