Guinness shares as recorded on the Nigerian Stock Exchange (NGX), are on the list of the 25 most valuable stocks in Nigeria. The company makes up to 0.467% of the NGX equity market (with a large market capitalization of NGN 138 billion).
In the current market and over the last 3 months, Guinness Nigeria has also been the 62nd most traded stock on the NGX (from Nov 4, 2022, to Feb 3, 2023), with about 23.3 million shares traded. As of February, the company closed over 3,000 deals valued at N1.53 billion.
Source: Guinness Nigeria
A Decline in Earnings For Guinness Shares
It is 2023 and Guinness Nigeria seems to be losing a lot of earnings. The company might be going back to 2020 when it witnessed one of its worst earnings trajectories.
In the years 2017, 2018 & 2019, Guinness reported net profit(s) up until 2020 where the company made a net loss before returning to more profitable financial years in 2021 & 2022.
Guinness witnessed a 21% decrease in earnings (from N131.498 billion in 2019 to about N104.37 billion in 2020). The company was also required to pay a tax of N12.57 billion, which resulted in a net loss for the company.
Guinness underwent downward spirals in revenue & numerous one-time accounting adjustments of N13 billion with a 127% increase in net finance cost(s).
Guinness has witnessed a decline in revenue of 32%, from N4.03 billion in Q1 (February 2022), to N2.745 billion in Q1 (February 2023).
Looking at Guinness from a free cash flow perspective offers optimism.
From 2020-2022, Guinness Nigeria’s free cash flow had a massive growth rate of 109.92%. This is due to the increase from N1.927 in the 2020 financial year, to N17.925 billion as of the 2022 financial year-end.
Regarding earnings per share (EPS), there have been a trailing 12 months of earnings per share of N4.96. According to the Global Beverage Market, Guinness’s price-to-earnings (P/E) ratio is 12.7x and its trade is below the average competitors’ P/E ratio of 15.5x and the overall P/E ratio of 20x.= Therefore, Guinness stock is much cheaper in relation to its competitors in the industry.
Conclusion
Guinness is recognized as a dividend-paying company and its dividend yield is currently 11.33%. This yield is higher than the top/bottom 25% of dividend payers in the NG market. This simply implies that there is hope for Guinness to bounce back on earnings soon.
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