The Nigerian Exchange Ltd (NGX) Consumer Goods Sector Index comprises twenty (20) FMCGs which are engaged in the manufacture of a variety of consumer goods ranging from flour, sugar, beverages, beer, etc. Since the start of the year, the performance of this sector has increased slightly by 2.25%. Although not the best of results, the FMCG sector has experienced better growth compared to the banking and insurance sectors.
The article examines the cheapest FMCG stocks listed on the NGX. The five companies selected are those with the lowest price-to-earnings (P / E) ratio, as it is generally accepted that the lower the P / E ratio, the cheaper the stock. The P / E ratio compares a company’s profits in a given period, relative to its price in the same period.
Based on this, the five (5) cheapest stocks include:
Presco Plc is an agro-industrial company engaged in the development of oil palm plantations, palm oil milling, palm kernel processing and vegetable oil refining. It specializes in the cultivation of palm oil and in the extraction, refining and fractionation of crude palm oil into vegetable oil and palm stearin.
Presco Plc currently has a market capitalization of 68 billion Naira and outstanding shares of 31.40 billion Naira. In the first quarter of 2021, the agro-allied company announced a 47.40% increase in revenue, while after-tax profit rose 113.33%, from 1.80 billion naira to 3. 84 billion naira during the same period.
The company recorded 3.32% growth in total assets during the same period, from 73.77 billion naira to 76.22 billion naira and earnings per share increased 113.33% from 1.80 dwarf to 3.84 naira.
Presco Plc has a P / E ratio of 13.30x and its stock price is currently valued at 70.00 N. The company’s stock price has a year-to-date return of -1, 34%.
Nascon Allied Industries Plc is involved in the refining and distribution of salt. The company is engaged in the transformation of raw salt into refined, edible and industrial salt. Its segments include salt, seasoning, tomato, vegetable oil, and freight revenue.
Nascon Plc has a market capitalization of 39.74 billion Naira. The company reported 21.22% revenue growth from 6.88 billion naira to 8.34 billion naira and reported 723 million naira in after-tax profit (PAT) in the first quarter of the year, to reflect growth of 15.20%, despite the 15.20% increase in taxation.
Nascon’s total assets grew 5.78% from 44.78 billion naira to 47.37 billion naira and its P / E ratio stands at 8.68x. It is currently trading at N15.00.
The company’s stock price has a cumulative return of 3.45%.
Dangote Sugar Plc
Dangote Sugar Refinery Plc is engaged in the refining of raw sugar into edible sugar and in the sale of the product. The company is also engaged in the cultivation and milling of sugar cane.
The company has a market capitalization of 214 billion naira at the time of writing.
Dangote Sugar Plc recorded 41.46% revenue growth in the first quarter of 2021, while gross profit increased 41.52% from 12.72 billion naira to 18.04 billion naira. nairas. Net profit for the same period appreciated 30.30%, from 6.37 billion naira to 8.30 billion naira.
During the same period, total assets appreciated 5.48%, from 276.76 billion naira to 291.94 billion naira since the start of the year.
Likewise, earnings per share increased 28.30% from N 0.53 to N 0.68 in the current period. The company has a P / E ratio of 7.15x and is currently trading at 17.45N.
The Dangote Sugar share price shows a cumulative return of -0.85%.
Vitafoam Nig Plc
Vitafoam Nigeria Plc is a foam manufacturing company based in Ikeja, Lagos. It is one of the largest foam manufacturers in Nigeria, producing both soft and rigid polyurethane products. The company also owns a stake in Vitafoam Ghana and Vitafoam Sierra Leone.
The company has a market capitalization of N18.76 billion. He said a 55.77% increase in revenue, while net profit appreciated 47.34%, from 1.69 billion naira to 2.49 billion naira. Total assets also increased by 18.21%, from 21.64 billion naira to 25.58 billion naira.
Earnings per share increased 66.68% from N1.30 kobo to N2.17 kobo, with a P / E ratio of 5.06x.
The Vitafoam Plc share price has appreciated 96.79% year-to-date and is currently trading at 15.35N.
Northern Nigeria Flour Mills Plc (NNFM)
Northern Nigeria Flour Mills Plc is a flour mill in Nigeria that grinds wheat and other grains and sells its products under the Golden Penny brand. NNFM’s products include Wheat Flour, Semovita, Wheat Offal, Masa Flour, Germ Flour, Masavita and Corn Offal, Golden Penny Flour, Golden Penny Sugar, and Golden Penny Rice. .
The company has a market capitalization of 1.10 billion naira and recorded 8.17% growth in net profit from 64.64 million naira to 69.92 million naira in the audited financial statements for the year ended in March 2021. In the same vein, the profit per share appreciated by 8.33% from N3.60 to N3.90.
The company reported total assets of 7.37 billion naira at the end of the period. However, its share price has depreciated by -8.75% since the start of the year. It has a P / E ratio of 3.34x and is currently trading at 6.15 N.
Why it matters
There are two reasons people invest. One for capital appreciation and one for dividend yield. As investors hunt for bargains, they hope to buy more for less. This article helps investors understand that price is not the only determinant of cheap stocks.