Investing in the stock market can be an excellent way to grow your wealth over time. As an intending investor in the Nigerian Stock Exchange (NSE), it’s important to identify promising stocks that have the potential for significant returns. Hence, it is best to analyze the different companies in the stock market before investing to enable you to get good returns. However, as it is with other businesses, sometimes you may not necessarily make profits in your investment hence it is best to study the stock market properly before investing.
In this article, we will help guide you by exploring some of the best stocks to buy in the Nigeria Stock Exchange. We will do this by analysing various factors such as market performance, company fundamentals, industry trends, and potential future growth which will serve as a guide whenever you want to invest. We hope that by the end of this write up, you’ll have a solid understanding of stocks that present compelling investment opportunities in the Nigerian market.
Best Stock To Buy In Nigeria Stock Exchange
There are many stocks that you can buy from Nigerian Stock Exchange market, they include:
1. International Breweries (NGX: INTBREW)
The International Breweries Plc is a popular brewery company in Nigeria that brews, packages and sells different ranges of non-alcoholic malt beverages and beer like Hero, Grand Malt, Voltic Water, Castle Milk Stout, Castle Lager and Redds.
The company was established in 1971 and in 1995, the International Breweries Plc was listed on the Nigerian Stock Exchange.
Currently, the price of buying shares from International Breweries Plc stocks is 5.50 Nigerian Naira (NGN). The current market capitalization of International Breweries Plc is 150 Billion Nigerian Naira(NGN). The outstanding share in the company is 26.9 Billion, hence it is one of the options to consider when you want to invest in the stock exchange in Nigeria.
2. UAC of Nigeria Plc (NGX: UACN)
United Africa Company of Nigeria is a company in Nigeria that manufactures and sells different kinds of food items, livestock feeds, quick service restaurants, bottled water, fruit juices and ice-cream. Apart from the above mentioned products, the company also produces and sells decorative products like paints etc.
The company was established in 1931 and since its inception the company has continued to expand its operations to different industries, value chain etc.
Currently, the price of United Africa Company of Nigeria Plc stocks is 9.50 Nigerian Naira (NGN). Its market capitalization is 27.4 Billion NGN with a total outstanding shares of 2.88 Billion NGN. It is a good option for investors looking for Nigerian exchange stock to invest in.
3. Transnational Corporation of Nigeria Plc (NGX: TRANSCORP)
Transnational Corporation of Nigeria Plc is a Nigerian group of companies that has a diverse area of operation. The company majors in power, energy, hospitality and agriculture sectors.
The company was established in 2004 and was listed in the Nigeria Stock Exchange(NSE) in 2006. Transcorp Nigeria has an investor base of over 300,000 shareholders. It has a market capitalization of 134 billion NGN. It is also a good option to consider when investing in the Nigeria stock exchange market.
4. Unilever Nigeria (NGX: UNILEVER)
Unilever Nigeria is a Nigerian company that manufactures and sells different kinds of foods and food ingredients, home care products and personal care products.
The company was established in 1923 and was listed in Nigerian Stock Exchange in 1973. It has a good investor base with a promising future. Unilever Nigeria market capitalization is 86.2 billion NGN. It is also an option to consider when investing in the stock exchange in Nigeria.
5. Dangote Cement Plc (DANGCEM)
It is no more news that Dangote Cement Plc(DANGCEM) is the biggest producer of Portland Cement in Africa and it is among the biggest companies in the Nigerian Stock Exchange market.
Dangote Cement Plc was established in 1992 and was listed in the Nigerian Stock Exchange market in 2010. The company has outlets in different African countries and it has continued to expand its operation to accommodate all and sundry that may need their products.
Dangote Cement Plc (DANGCEM) market capitalization is 4.89 trillion NGN. It is one of the most valuable companies in the Nigerian Stock Exchange market. In fact, it is the second most valuable company in the NSE.
6. MTN Nigeria Communications Plc (NGX: MTNN)
MTN Nigeria Communications Plc is a telecommunication group company that was established in 2001 which operates in 22 different countries of the world. It is the largest mobile operator in Nigeria and West Africa at large.
The company was listed on the Nigerian Stock Exchange in 2019.
Currently, the company is the most valuable company in the Nigerian Stock Exchange. It has a market capitalization of 5.39 trillion NGN.
7. Flour Mills of Nigeria (NGX: FLOURMILL)
Flour Mills of Nigeria is a Nigerian company that is involved in flour milling, importation, blending, distribution and sale of fertilizer, pasta production, manufacturing and marketing of laminated and woven polypropylene sacks etc.
The company’s market capitalization is 143 billion with a promising future. It is also a good option to consider when investing in the Nigerian stock exchange market.
8. Guaranty Trust Bank Plc
Guaranty Trust Bank (GTBank) is one of the well-established Nigerian financial institutions that has consistently outperformed its peers. As one of the largest banks in Nigeria, The bank is known to have a strong balance sheet, a wide range of financial services, and a robust customer base. The financial institution is committed to innovation and technological advancement which gives it an edge over their contemporaries. GTBank’s steady profitability, sound management, and strong corporate governance make it an attractive stock for investors looking for exposure to the Nigerian banking sector.
9. Nestle Nigeria Plc
Nestle Nigeria Plc is a subsidiary of the global food and beverage giant Nestle. It is known for brewing different kinds of beverages, they also produce other quality products. The company has a dominant market position in various consumer goods categories, including beverages, confectionery, and dairy products. Nestle Nigeria has a strong distribution network, a well-recognized brand, and they are committed to product innovation. With Nigeria’s growing population and increasing disposable income, Nestle Nigeria is well-positioned to benefit from the rising demand for consumer goods, making it an attractive long-term investment option.
How To Buy Stocks In Nigeria
After going through the above list and you wish to invest in any of the companies, you can follow these steps to do that. The steps are:
- Choose a Stockbroker
- Open a Stockbrokerage Account
- Research and Select Stocks
- Place a Buy Order
- Monitor Your Investments
Let’s take it one after the other.
1. Choose A Stockbroker
The first thing to do when you want to invest in stocks in Nigeria is to choose a stockbroker, which will acts as an intermediary between the stock market and you.It is best to choose a renowned stockbroker that is fully registered with the Nigerian Stock Exchange and has an operating license from the Securities and Exchange Commission (SEC).
2. Open A Stockbrokerage Account
The next step is to reach out to your chosen stockbroker to open a stockbrokerage account. During the stockbrokerage account opening, you will be required to provide relevant documents and personal details. Ensure that you provide the correct and updated information of yours to ensure smooth account opening.
3. Research And Select Stocks
Before you invest in the companies listed on the Nigerian stock market, it is best to conduct thorough research before choosing the company to invest. It is best to check some factors like the industry’s trend, growth prospects and their financial performance. After the research, you can then choose the stock that is in line with your proposed investment goals.
4. Place A Buy Order
After choosing the stock you want to invest in, inform your stockbroker to place a buy order on your behalf. When instructing the stockbroker, specify the exact number of shares you wish to buy and the amount you want to use in buying them.
5. Monitor Your Investments
Once you’re done buying the shares, it is of utmost importance to monitor your investment on a regular basis. You can monitor it by keeping yourself updated on the company’s news, market trends etc. It is advisable to set up investment alerts on devices using the investment apps which will help you to track your investment progress.
Investing in the Nigerian Stock Exchange requires careful consideration of various factors to identify the best stocks. While the stocks mentioned in this article, including Dangote Cement Plc, Guaranty Trust Bank Plc, Nestle Nigeria Plc, Nigerian Breweries Plc etc. have shown consistent growth and profitability, it’s important to conduct thorough research and consult with financial advisors before making any investment decisions. In all, the Nigerian Stock Exchange offers promising investment opportunities, and with proper analysis, investors can capitalize on Nigeria’s economic growth and the potential of these top-performing stocks.