Nigerian Banking Giants – FUGAZ Stocks Earn ‘BUY’ and ‘HOLD’ Ratings

by Ikem Emmanuel

Nigeria’s banking giants, collectively referred to as FUGAZ (First Bank, UBA, GTCO, Access HoldCo, and Zenith Bank), continue to garner favorable ratings from financial analysts. These ratings reflect their promising potential for growth and income. The ratings are derived from Greenwich Merchant Bank, Meristem, and Aurthur Steven Asset Management, with consensus “BUY” recommendations for Access Holdco and GTCO, and varying “BUY” and “HOLD” ratings for FBNH, UBA, and Zenith Bank.

Key Insights:

1. Analyst Ratings: Financial analysts assess publicly traded companies and their stocks, providing recommendations categorized as “BUY,” “HOLD,” or “SELL.” These ratings guide investors in making informed decisions about their investments.

2. Investment Potential: The “BUY” and “HOLD” recommendations for these banking stocks indicate the analysts’ confidence in their future price appreciation. These ratings consider factors like intrinsic or fair value, earnings outlook, growth potential, sector trends, dividend income, and other relevant data.

3. Strong Performance: As of October 22, 2023, the FUGAZ stocks have collectively achieved a year-to-date (YTD) share price average gain of 76.83%. In addition to capital gains, these stocks provide an average dividend yield of 7.94%.


4. Real Returns: The YtD price gain surpasses the inflation rate, ensuring that investors not only see an increase in the value of their investments but also enjoy a positive real return.

5. Individual Stock Highlights:

  • UBA: With a low P/E (TTM) ratio of 1.39x and a dividend yield of 7.31%, UBA offers an attractive valuation. The total return for UBA investors is an impressive 159.28%.
  • Zenith Bank: Enjoying a “BUY” recommendation, Zenith Bank’s share price trading at N33.25 per share comes with a P/E ratio of 2.58x. It offers the highest dividend yield of 10.23% and a total return of 48.77%.
  • Access Holdco: It has a higher P/E ratio of 2.95 but a unanimous “BUY” recommendation from analysts. It offers a dividend yield of 9.67%, resulting in a total return of 104.37%.
  • GTCO: Also receiving a “BUY” recommendation, GTCO has a P/E ratio of 2.66. It provides a dividend yield of 9.38% and a total return of 62.42%.
  • FBNH: Despite “HOLD” recommendations, FBNH stands out with a relatively lower P/E ratio of 2.15x, below the group’s average. It offers a dividend yield of 3.14% and a total return of 49.02%.

6. Dynamic Ratings: It’s important to note that these ratings are dynamic and subject to change as new information emerges. Analysts continuously review their recommendations to adapt to evolving market dynamics and company developments.

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In summary, the FUGAZ banking stocks offer diverse strengths that cater to various investor preferences, with attractive potential for growth and income. However, potential investors should keep track of evolving ratings and market developments to make informed investment decisions.

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