YoungBuffet:
Good analysis but what is the assurance that that dividend would be sustainable in the long run

emmanuelewumi:
If you know you know, better than opening shop sef if you have the right tools.
I will share my thoughts on NASCON before the end of the week

Ades1:



The question is, how many people invested 15 million in UCAP at N3? The few that did most likely sold when it hit N10 for a nice 250% return while also p itocketing some juicy dividends along the way.

I now people here bought UCAP at cheap rates but there is difference between investing N500k and N15M

YoungBuffet:


Good analysis but what is the assurance that that dividend would be sustainable in the long run

yMcy56:

Rome wasn't built in a day......and,
A journey of a thousand miles begins with a step.

That was a good plan if you asked me because not all are traders.
We have those who invest for passive income, so such plan is a good one in my opinion.

Even if you buy at N10, with regular cashflow and, if you're consistent and keeps increasing your stake, you'll be earning something on monthly basis I Blv.

emmanuelewumi:



Looking at my earning growth analysis the 5yr compounded annual earning growth rate of United Capital is 30%, I think that should be one of the highest on NGX, the current EPS is 43% higher than the average 5yrs EPS this does not look like a company whose growth will end soon, although I expect the growth to slow down to about 18% in the next 5 years.


One of my mentors said if the current EPS of a business is 20% or more higher than its average 5yr EPS, you should know that the growth is not slowing down soon

yMcy56:

Why liase with Mcy?
For your info, I do not belong to any Whatsapp group...
* Whatever you see me post here are efforts of my own hardwork in my own little way......going out of my way to do readings, observe, study trends, etc.

I was once invited to a WhatsApp group and the day I posted/made appearance there was the day I exited the group due to some biases expressed against my person.
Also, they're more of value/long term investors and me I be trader, I don't really look belonging there. So I quit.

YoungBuffet:


As much as i love your analysis, nothing is certain in life is only death that is certain. If involves in wrong investment like going into bonds investment and the investment goes south like what is currently happening in Ghana am sure it will affect their projected earnings at the end of the day so how will the same dividend be constant yearly. UCAP paid almost all their EPS as dividend that also to me am not comfortable unlike banks like zenith paying 3 from 8 naira EPS.

emmanuelewumi:



MTN pays 90% of its earnings as dividends but the compound anualized earning growth is almost 26% with a return on equity of over 100%.

When you reinvest substantial percentage of your earnings without a very good earning growth over a period of 5years and improvement on the return on equity, management is doing a clumsy job and not creating wealth for shareholders.


Please note,i always make a provision of 33% discount whenever I use the annual growth rate and dividend yield as the basis of my valuation,l use the average 5 year EPS

9free:
Neither flesh nor blood revealed this to you.

emmanuelewumi:
Earning Growth analysis of some of the businesses that recently released their 2022 results.


One of the way to grow wealth through the stock market is to invest in businesses that are consistently growing their earnings and the return on invested capital is higher than their Weighed Average Cost of Capital.


In my analysis I looked at the 5 years compounded annual earning growth rate, 3 years compounded annual growth rate, year on Year growth, average 5 years EPS and the percentage difference between the average 5year EPS and the current EPS.


This is just an earning growth analysis, you need to carry out your financial health/earning quality analysis, value creation analysis of the businessess before making a decision

YoungBuffet:


u cant compare MTN ucap just one bad investment then their earnings turns negative.

emmanuelewumi:



Did you read what I wrote earlier, you need to know how to analyze the earning quality/financial health, value creation ability and earning growth of the business




Do you know that the MTN you are so confident about has a negative working capital of over N400 billion, but the company is generating awesome revenue of over N2 trillion

YoungBuffet:



Reason why i said they are incomparable despite the negative 400bn

ositadima1:


This concept is fundamental because if you take out a loan to invest, your investment should generate enough returns to cover the interest payments and yield additional profits, which is the idea behind opportunity cost. It would be nice if we can see the weighted average cost of capital for each return side by side.

emmanuelewumi:



From my layman's perspective I will choose United Capital over MTN after considering the earning quality, earning growth, dividend growth, working capital and valuation of both businesses


My opinion though

emmanuelewumi:
Earning Growth analysis of some of the businesses that recently released their 2022 results.


One of the way to grow wealth through the stock market is to invest in businesses that are consistently growing their earnings and the return on invested capital is higher than their Weighed Average Cost of Capital.


In my analysis I looked at the 5 years compounded annual earning growth rate, 3 years compounded annual growth rate, year on Year growth, average 5 years EPS and the percentage difference between the average 5year EPS and the current EPS.


Dangote Sugar
5yr CAGR 24.9%

Dangote cement
5yr CAGR 11.5%

BUA
5yr CAGR 12.1%

Lafarge Africa
3 years CAGR 30%

Vitafoam
5 years CAGR 49.5%

MTN
5yr CAGR 25.5%

Nigeria Brewery
5yr CAGR (8%)

United Capital
5yr CAGR 30%

Nestle
5yr CAGR 5%

NASCON
5yr CAGR 6%

This is just an earning growth analysis, you need to carry out your financial health/earning quality analysis, value creation analysis of the businessess before making a decision

ositadima1:


I drew an intriguing comparison between the 5 year earning growth and the stock growth expressed in the form of price appreciation. It was interesting to note that some stocks demonstrated similar growth rates in both areas. However, if earning growth impacts investors' perception of a stock's attractiveness, why do some stocks perform differently? For example, consider the case of Wapco, which has seen a negative growth rate of -7 in contrast to a positive growth rate of 30 in earning growth. One possible explanation could be that the market had overvalued it in the past and has now corrected its price accordingly. Alternatively, there may be untapped value in the company that has yet to be fully realized.Note that SCAGR refers to the price growth rate over five years, while ECAGR represents the earning growth rate over the same period.

emmanuelewumi:



What was the stock price of Lafarge 3 years ago, I don't have the figures.

Agbalowomeri:
The matter carry python for head Lol

ositadima1:


I have a passion for python, finance and sex. Na so we see am.

ositadima1:


I drew an intriguing comparison between the 5 year earning growth and the stock growth expressed in the form of price appreciation. It was interesting to note that some stocks demonstrated similar growth rates in both areas.

However, if earning growth impacts investors' perception of a stock's attractiveness, why do some stocks perform differently? For example, consider the case of Wapco, which has seen a negative growth rate of -7 in contrast to a positive growth rate of 30 in earning growth.

One possible explanation could be that the market had overvalued it in the past and has now corrected its price accordingly. Alternatively, there may be untapped value in the company that has yet to be fully realized.

Note that SCAGR refers to the price growth rate over five years, while ECAGR represents the earning growth rate over the same period.

Stan2330:

Pls did u take into account changes in shares outstanding to estimate EPS growth rate? Or is there no need for that?

Stan2330:

Pls did u take into account changes in shares outstanding to estimate EPS growth rate? Or is there no need for that?

ositadima1:


About 40 naira on 1/23/2017

ositadima1:


I referenced @emmanuewumi for the earnings CAGRs, which was derived from his post. I believe PAT(earnings) and EPS are lifted from the financial statements.

While adjusted prices are more accurate as they account for splits and dividends, this approach requires data that is not readily available. So, I use close prices in my calculations.

emmanuelewumi:
Earning Growth analysis of some of the businesses that recently released their 2022 results.


One of the way to grow wealth through the stock market is to invest in businesses that are consistently growing their earnings and the return on invested capital is higher than their Weighed Average Cost of Capital.


In my analysis I looked at the 5 years compounded annual earning growth rate, 3 years compounded annual growth rate, year on Year growth, average 5 years EPS and the percentage difference between the average 5year EPS and the current EPS.


Dangote Sugar

5yr CAGR 24.9%
3yr CAGR 59.6%
YoY 145%

5y average EPS N2.37k
Current EPS N4.51
Diff between current EPS and average EPS 90%



Dangote cement

5yr CAGR 11.5%
3yr CAGR 7.4%
YoY 6.5%

5yrs average EPS N20.6
Current EPS N23.87
Different between current EPS and the average EPS 15%.
Pls note that yr1 EPS of Dangote cement was adjusted for tax credit or pioneer status waivers


BUA
5yr CAGR 12.1%
3yr CAGR 18%
YoY 12%
5 years average EPS N2.28k
Current EPS N2.98k
Difference between the current EPS and the average EPS is 30%


Lafarge Africa

3 years CAGR 30%
YoY 5%
3 years average EPS N2.00
Current EPS N3.33k
Difference between the current EPS and average EPS is 66%.
Please note the analysis was done for Lafarge over a period of 3 years after the business was turned around.


Vitafoam

5 years CAGR 49.5%
3yr CAGR 13.7%
YoY : Flat
5yr average EPS N2.28k
Current EPS N3.53k
Difference between the current EPS and average EPS 53%


MTN

5yr CAGR 25.5%
3yr CAGR 32.7%
YoY 21%
5yr average EPS N11.90k
Current EPS N17.80k
Difference between the current EPS and the average EPS 49%

Nigeria Brewery
5yr CAGR (8%)
3yr CAGR 35%
YoY 4.3%
5yr average EPS N1.73k
Current EPS N1.68k
Difference between the current EPS and average EPS (4%)
Note that earnings retrogressed in Nigeria Brewery in the last 5 years, the current EPS is 4% less than its average 5yrs EPS


United Capital

5yr CAGR 30%
3yr CAGR 28.6%
YoY (14%)
5 yr average EPS N1.50k
Difference between the current EPS and the average EPS 43%



Nestle
5yr CAGR 5%
3 yr CAGR 11.7%
YoY 22.3%
5yr average EPS N54.70k
Current EPS N61.80k
Difference between the current EPS and the average EPS 13%


NASCON

5yr CAGR 6%
3yr CAGR 42%
YoY 89%
5yr average EPS N1.30k
Current EPS N2.06k
Difference between the current EPS and the average EPS 59%.


This is just an earning growth analysis, you need to carry out your financial health/earning quality analysis, value creation analysis of the businessess before making a decision

emmanuelewumi:



I also do a 5 yr earning CAGR, 3 yr earning CAGR and Year on Year growth.


The essence is to see if the earning CAGR will reduce or increase going forward.


Look at NASCON the 5 yr CAGR is 6%, 3 yr CAGR is 42% and Year on Year earning growth is 89%. With this it is safe to say next year 5 yr CAGR will increase to 20% or thereabout


Where Dangote cement 5yr CAGR is 11.5%, 3 yr CAGR is 7.4%, year on Year earning growth is 6.5%. it is safe to say future CAGR of Dangote cement might slow down

emmanuelewumi:




Yes it is based on the outstanding shares, always check the 5 year financial summary towards the last page of the report