In 2024, the Nigerian Exchange (NGX) demonstrated resilience amidst challenging economic conditions, with the All-Share Index (ASI) posting a 37.65% year-to-date (YtD) gain.
While this performance is above the current inflation rate, it slightly underperformed the 45.90% YtD gain recorded in 2023, reflecting a more tempered investor sentiment.
This moderation in market activity is further evident in the reduced number of stocks achieving triple-digit YtD gains: about 35 stocks in 2024, compared to over 50 stocks in 2023.
Despite this, a handful of companies stood out, driving significant wealth creation for investors and highlighting their market dominance.
Amid this landscape, some high-value companies delivered outsized returns to their investors.
BUA Foods, Dangote Cement, Seplat Energy, Geregu, and Airtel Africa collectively added N11.6 trillion to their market capitalization, with each contributing over N1 trillion.
Notably, these companies are characterized by their high share prices, which amplify their market capitalization gains
Airtel Africa: +N1.014 trillion YtD gain
Airtel Africa added N1.014 trillion to its market capitalization in 2024, closing the year at N8.105 trillion.
However, its 14.3% YtD share price gain was modest, slightly below the 15.41% recorded in 2023.
This can be partly attributed to tempered investor sentiment, probably due to the company’s financial performance.
In its first-half 2025 financial year earnings report, Airtel revealed a 9.7% drop in reported revenue to $2.37 billion, largely due to a $660 million hit from currency devaluations. Inflationary pressures, including sharp increases in fuel costs, drove operating expenses up by $271 million, squeezing EBITDA margins from 49.6% to 45.8%.
This followed a pre-tax loss of $63 million for the financial year ended March 2024, a stark contrast to the $1.034 billion pre-tax profit recorded in 2023.
Low trading activity; 306,410 shares valued at N691 million in the last three months, suggests subdued market interest. While this may attract conservative investors seeking stability, it also highlights liquidity concerns that could deter others.
To enhance share price performance, Airtel Africa must mitigate macroeconomic risks, strengthen operational efficiency, and maintain its strong dividend policy.
The recent declaration of an interim dividend of 2.6 cents per share for the first half of the 2025 fiscal year, representing a 9% increase, highlights the company’s commitment to shareholder returns.
This move could attract income-focused investors and bolster existing shareholder confidence.
Geregu Power: +N1.887 trillion YtD gain
Geregu began the year with a market capitalization of N997.500 billion and closed at N2.875 trillion, reflecting an impressive 188% YtD gain. This builds on the strong performance in 2023, where the stock gained 168% YtD.
The share price rally seems to be driven by improved investor sentiment, supported by the company’s strong financial performance and growth prospects.
Geregu’s price-to-earnings ratio of 100x positions it as a high-growth stock in investors’ eyes.
For the nine months of 2024, pretax profit doubled to N36.2 billion, while revenue surged by 102% YoY to N112.5 billion, even as the company operated at 50% capacity.
However, its dividend yield of 0.70%, based on the last annual dividend of N8, remains relatively low. Increasing the dividend could attract income-focused investors, further enhancing sentiment and potentially boosting share price performance.
Seplat Energy: +N1.995 trillion YtD gain
Seplat Energy ranked third, adding N1.995 trillion to its market capitalization to close the year at N3.354 trillion, ranking the company as the 5th most valuable company on the NGX.
The company’s share price surged from N2,310 to N5,700, marking a 148% YtD gain, outperforming its 110% YtD gain in 2023.
The share price appears to be supported by its financial performance and dividend payout policy.
Seplat Energy achieved an impressive 483% YoY increase in pre-tax profit for the first nine months of 2024, reaching N366.711 billion.
This indicates that the company’s core operations are generating substantial profitability. For investors, this suggests strong potential for sustained earnings and returns, as robust profitability often supports share price growth and dividend payouts.
On the balance sheet side, the equity multiplier, a measure of financial leverage, reflects how much of the company’s assets are financed by shareholder equity. Seplat’s low multiplier of 1.87 indicates limited reliance on debt, which reduces financial risk. For investors, this is a positive signal of financial stability and long-term sustainability.
The company’s consistent quarterly dividend payments are an attractive feature for income-focused investors. Regular dividends can provide steady cash flow, offering a buffer against market volatility.
Seplat’s high trading activity, with 96 million shares valued at N96 billion traded in the last three months, suggests significant market interest. While this demonstrates liquidity, high volatility can mean sharp price swings, which may be a concern for risk-averse investors.
Despite strong pre-tax profit, increased tax liabilities resulted in a post-tax loss of N15.284 billion. This could erode retained earnings and impact future dividend payouts if not managed effectively.
Investors should monitor how the company addresses this issue, as it may affect both income stability and long-term growth prospects.
Dangote Cement: +N2.708 trillion YtD gain
Dangote Cement secured the second spot, adding N2.708 trillion to its market capitalization and closing the year at N8.159 trillion, maintaining its position as the most valuable company on the NGX.
The company began 2024 with a share price of N319.90, which surged to N686.70 by the end of Q1, pushing its market capitalization to an impressive N11.701 trillion, representing a 115% YtD gain.
However, market adjustments in Q2 resulted in a loss of over N341 billion, with the share price settling at N478.80 by the year’s end. Despite this decline, Dangote Cement still delivered a robust 50% YtD gain, translating to over N2 trillion in added value for investors.
As Nigeria’s leading cement producer, Dangote Cement boasts a strong market presence. However, its nine-month 2024 results revealed contracting margins due to rising costs, limiting pre-tax profit growth to a modest 0.37%.
Despite these challenges, shareholders have consistently enjoyed substantial returns, with cumulative dividends totaling N2.8 trillion by 2024. In 2023, the company increased its dividend by 50% to N30 per share, yielding 6.27% at the current share price of N478.80.
Its dividend policy may continue to bolster investor confidence and could sustain share price growth into 2025, with a likely dividend increase for the 2024 financial year.
BUA Foods: +N3.988 trillion YtD gain
Leading the pack is BUA Foods, which recorded an impressive N3.988 trillion Year-to-Date (YtD) gain in market capitalization, closing the year at N7.47 trillion.
This ranks BUA Foods as the third most valuable company on the NGX.
The company’s share price surged by 114.58% YtD, closing at N415. However, this marks moderation from the 197% YtD gain recorded in 2023.
Despite this, strong fundamentals continue to bolster investor confidence. BUA Foods demonstrated robust financial growth in the first nine months of 2024, with revenue increasing by 104% and profit before tax rising by 94%.
While the company’s high price-to-earnings ratio (35%) reflects strong investor confidence, low share price volatility and a modest dividend yield of 1.33% could limit total returns.
Enhancing its dividend payout in 2024 may help BUA Foods sustain it’s appeal to investors.
