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5 Best Shares for Beginners on the Nigerian Stock Exchange

Updated 17 Aug 2022
5 Best Shares for Beginners on the Nigerian Stock Exchange

The 5 Best Shares for Beginners on the Nigerian Stock Exchange revealed. We have carried out in-depth research to find the 5 Best Shares for Beginners that are listed on the Nigerian Stock Exchange (NGX).

This is a complete guide to the 5 Best Shares for Beginners on the Nigerian Stock Exchange.

In this in-depth guide you’ll learn:

  • Which Nigerian shares are the best for Beginners?
  • 5 Best Shares for Beginners on the Nigerian Stock Exchange
  • How to choose the Right Share Broker in Nigeria
  • The Best Share Brokers in Nigeria

And lots more…

So, if you’re ready to go “all in” with the 5 Best Shares for Beginners on the Nigerian Stock Exchange…

Let’s dive right in…

Which Nigerian shares are the best for Beginners?

While there is no fool-proof method for selecting the ideal stock, while you are still learning about investing, it is the best idea to stay with defensive companies that have less volatility and pay a dividend.

Although there are few certainties in the stock market, huge firms in defensive industries like utilities, consumer staples (such as food, drinks, or toiletries), or healthcare are often the safest stocks for novices.

Thus, beginners have a decent chance of being shielded from excessive risk by these stocks.

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5 Best Shares for Beginners on the Nigerian Stock Exchange

Lafarge Africa Plc (NGX: WAPCO)

Cement producer Lafarge Africa Plc is listed on the Nigerian Stock Exchange and has its headquarters in Lagos.

The Holcim Group has considerable influence. Following the merger between Lafarge and Holcim and the subsequent consolidation of Lafarge’s holdings in Nigeria and South Africa, the company is now known as Lafarge Africa and will no longer use the Lafarge Wapco Plc brand.

With a market value of NGN 419 billion or around 1.49% of the NGX equity market, Lafarge Wapco is the tenth most valuable company there is right now. Lafarge Wapco’s share price and recent performance place it 47th on the NGX year-to-date performance rankings.

Growth and Valuation Information
Share Price 26.00 NGN
Market Capitalization 419 billion NGN
Gross Turnover 91.6 million NGN
Earnings Per Share (EPS) 3.69 NGN
Price/Earnings Ratio 7.05
Dividend Yield 7.69%
Shares Outstanding 16.1 billion

MTN Nigeria Communications Plc (NGX: MTNN)

MTN Nigeria Communications Plc is the Nigerian affiliate of the MTN Group, which is a multinational telecommunications corporation with operations in 22 countries spanning Africa and the Middle East. The company was created in February 2001.

Since the company’s foundation, MTN Nigeria has been at the forefront of the expansion of the telecommunications sector, eventually becoming the largest mobile operator across the whole of West Africa.

MTN Nigeria is the second most valuable stock on the NGX with a market value of NGN 4.66 trillion, representing about 16.6% of the whole Nigerian Stock Exchange equities market.

MTN’s share price started the year at 197.00 NGN and has since increased by 16.2%, placing it in the 39th position on the NGX in terms of year-to-date performance.

Growth and Valuation Information
Share Price 229.00 NGN
Market Capitalization 4.66 trillion NGN
Gross Turnover 177 million NGN
Earnings Per Share (EPS) 15.81 NGN
Price/Earnings Ratio 14.49
Dividend Yield 5.73%
Shares Outstanding 20.4 billion

Zenith Bank Plc (NGX: ZENITHBANK)

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Zenith Bank Plc is a commercial bank located in Nigeria that caters to the banking needs of corporate, commercial, and individual clients.

After a remarkably successful initial public offering (IPO), Zenith Bank became a public limited company in June of 2004, and it was subsequently listed on the Nigerian Stock Exchange in October of the same year.

The bank is now the largest in Nigeria in terms of tier-1 capital and has a shareholder base of around one million people.

Zenith Bank has around 500 branches and business offices located in commercial hubs throughout all states of the federation, as well as the Federal Capital Territory.

The bank’s headquarters are in Lagos, and with a market value of NGN 689 billion, Zenith Bank Plc is now the ninth most valuable company traded on the NGX. This represents around 2.45% of the total equity market traded on the Nigerian Stock Exchange.

Growth and Valuation Information
Share Price 21.95 NGN
Market Capitalization 689 billion NGN
Gross Turnover 208 million NGN
Earnings Per Share (EPS) 7.95 NGN
Price/Earnings Ratio 2.76
Dividend Yield 14.12%
Shares Outstanding 31.4 billion

Julius Berger Nigeria Plc (NGX: JBERGER)

Julius Berger Plc is a Nigerian industrial enterprise that provides integrated construction solutions and allied contractual services via its subsidiaries.

Julius Berger’s activities date back to 1965, when the Eko Bridge, a significant infrastructural project in the megacity of Lagos, was constructed.

This pioneering project was followed by years of consistent expansion, during which Julius Berger Plc used innovative construction techniques to emphasize innovation and quality for the benefit of customers in several sectors throughout the nation.

Julius Berger Nigeria Plc is the thirty-fourth most valuable stock on the NGX, with a market value of NGN 43,4 billion, or around 0.154% of the Nigerian Stock Exchange equity market.

Julius Berger started the year with a share price of 22.35 NGN, which has since increased by 21.3%, placing it in the 30th position on the NGX in terms of year-to-date performance.

Growth and Valuation Information
Share Price 27.10 NGN
Market Capitalization 43.4 billion NGN
Gross Turnover 2.52 million NGN
Earnings Per Share (EPS)
Price/Earnings Ratio
Dividend Yield 9.23%
Shares Outstanding 1.6 billion

Seplat Energy Plc (NGX: SEPLAT)

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Formerly known as Seplat Petroleum Development Business Plc, Seplat Energy Plc is a Nigerian oil and gas exploration company with a portfolio of properties in the Niger Delta Region.

Seplat Energy is now the sixth most valuable company on the NGX, with a market value of NGN 842 billion, or around 2.99% of the NGX equity market.

Seplat Energy’s share price started the year at 650.00 NGN and has since increased by 120%, placing it sixth on the NGX in terms of year-to-date performance.

Growth and Valuation Information
Share Price 1,430.50 NGN
Market Capitalization 842 billion NGN
Gross Turnover 13 million NGN
Earnings Per Share (EPS) 92.57 NGN
Price/Earnings Ratio 15.51
Dividend Yield 6.81%
Shares Outstanding 588 million

How to choose the Right Share Broker in Nigeria

Traders could not have picked a more favourable time to enter the investment market than the present. Competition among online brokers is high, which means costs are dropping down and features are being boosted.

Those interested in trading global financial instruments could choose from a wide variety of online forex and CFD brokers. However, there are several factors to consider when choosing a broker and we will go through them here.

Commission Charges

Individual stocks, options, mutual funds, exchange-traded funds, and bonds are the main investment types offered by brokers. Some will also provide exposure to the forex market, futures trading, and cryptocurrency exchanges.

Both the suitability of the broker’s offerings to your investment requirements and the fees you must pay is dependent on the investments the broker has available. You should pay close attention to the commissions that are involved with the investments you like.

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Overall Reliability

There is a diverse selection of brokers available. Several have been popular for many years, while others have just recently emerged.

That does not imply they cannot be trusted, but if they are managing transactions for clients, they are members of a self-regulatory organization like the Financial Industry Regulatory Authority (FINRA), the Financial Conduct Authority (FCA), and other regulators, or subject to additional oversight.

Account Fees

While it could be impossible to eliminate account fees, they may be kept to a minimum. To withdraw funds or investments, or to close your account, most brokers will assess a fee. When switching brokers, your new firm could pay some or all your transfer expenses.

If a broker does not charge them, or if you do not use their optional services, you could avoid paying most additional costs.

Annual costs, inactivity fees, trading platform subscriptions, and additional charges for research or data are all examples of the kind of expenses you should be aware of.

Pricing and Execution on Trades

Cost is less of a factor today, leading to commission-free transactions becoming the norm at most brokerages.

However, you should consider the brokerage’s position on the controversial practice of paying for order flow and how much it costs before making a final decision.

This is especially true if you are an active trader who wants their deal completed at the best price possible, even if it means a difference of a few cents.

Additional Tools, Educational Materials, and Features

Look for a brokerage that provides free educational tools like live webinars, detailed how-to instructions, video tutorials, glossaries, and more if you are just starting in the investment world.

You should also look at the broker’s commitment to educating its customers about the inherent hazards of more complex trading tactics like options.

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Conclusion

Even if you are just starting and have a limited budget, you can invest. It is more complex than simply choosing the best investment, which is a challenging enough task in and of itself. You also need to be aware of the limitations that apply to you as a novice investor.

Therefore, we have provided a comprehensive list of the five best shares listed on the NGX for beginners in Nigeria.

FAQs