Fellow investors have long praised—and envied—Warren Buffett’s seemingly uncanny ability to pick stocks.
By steadfastly following certain investing principles, he has amassed a net worth estimated at $130 billion, as of July 2024.
The question is: what exactly does he look for in a stock? In picking stocks, Warren Buffett looks for companies that have provided a good return on equity over many years, particularly when compared to rival companies in the same industry.
Buffett also reviews a company’s profit margins to ensure they are healthy and growing. Again, Buffett prefers companies that have a unique product or service that gives them a competitive advantage. As a value investor, he seeks out stocks that are undervalued relative to the company’s intrinsic worth.
Having read many uninformed write-ups that were hurriedly coupled by writers of interest with the intent to misinform the investing public, but with Buffett’s approach in stock picking, you are safe either buying or holding stocks of Fidelity Bank Plc.
In the stock market, prices move up and down, driven in the short term by supply and demand factors.
Without sentiments, value-hunting investors in Nigeria’s stock market are expected to focus on fundamentally strong stocks, particularly in key sectors seen to be benefiting from economic recovery and policy support.
Read also: Fidelity stock dips 3.85% as bank clarifies position on Supreme Court judgement
Earlier this year, we carefully looked at some brokers’ stock picks for the year 2025 and found banks, telcos, energy, cement, and insurance stocks making their lists.
For the banks, Fidelity stocks weren’t missing in their picks for the year. Notably, Fidelity Bank, like other value stocks within the banking sector,r are projected to deliver stronger returns in the year 2025, reflecting the sector’s resilience and adaptability in a dynamic economic environment.
Tracking market performance shows that Fidelity Bank is among banking names that contributed to the 37.65 percent return the NGX All-Share Index delivered in 2024. The same stock had, prior to 2024, put smiles on the faces of its investors, be it in the form of capital appreciation or dividend yield.
Fidelity Bank has remained one of the most attractive stocks on the market, outperforming both the average return for the entire market and particularly the banking sector.
Recall the NGX ASI return in 2024 made it deliver its fifth consecutive year of gains (2020: 50.07percent; 2021: 6.07percent; 2022: 19.98percent; 2023: 45.90percent) with a five-year compound annual growth rate (CAGR) of 30.85 percent far ahead of returns on T-bills and FGN bonds over the same period”.
Fidelity stock will be up again!…
For the banking sector, stocks to buy in 2025, according to Lagos-based Meristem research analysts, are Access Holdings, ETI, FCMB, Fidelity Bank, FBN Holdings, GTCO, Jaiz Bank, Stanbic, Sterling, UBA, Wema and Zenith Bank. Though most banking counters are selling activities of profit-takers lately, it is noteworthy that the capital raising activities by banks, particularly amongst lenders that are yet to meet the Central Bank of Nigeria (CBN) regulatory requirement, will further create liquidity in the stocks.
For Meristem analysts, the banking sector is set to sustain earnings growth in 2025 through strategic loan portfolio expansion and the maintenance of elevated interest rates. Banks boasting robust Current Account Savings Account (CASA) ratios are expected to achieve cost efficiencies and enhanced net interest margins.
“The continued adoption of digital technologies will further drive operational efficiency and bolster non-interest income streams. While foreign exchange and trading revenues will remain significant for some banks, they are anticipated to exhibit reduced volatility compared to 2024.
I have no doubt Fidelity Bank is one of them.
What further strengthens the analyst’s buy decision in favour of Fidelity Bank is that the banking industry’s focus is expected to be on optimising revenue streams and refining cost structures, leveraging digital innovation and diversification to ensure sustainable growth.
Read also: Fidelity emerges fastest-growing brand as value more than triples
Strong asset base …
Fidelity Bank Plc added N1.63 trillion to its asset base within three months to March 2025 to strengthen its position as one of the seven largest banks in Nigeria, in terms of asset base.
Banks with strong balance sheets are better able to maintain lending during the crisis.
The reports showed that Fidelity Bank’s total assets rose from N8.82 trillion by December 31, 2024, to close March 31, 2025, at N10.45 trillion. The total balance sheet underlined the bank’s reputation as one of the most preferred banking brands, with double-digit growth in customers’ deposits.
Fidelity Bank’s customers’ deposits rose to N6.6 trillion by the first quarter of 2025, as against N5.94 trillion by December 2024. The growth in customers’ deposit base was driven by double-digit growth in low-cost deposits to N6.1 trillion, representing 92.2 per cent of total customer deposits.
Shareholders’ funds jumped from N897.87 billion in December 2024 to N933.14 billion by March 2025. The increase was mainly driven by the significant improvement in the profitability of the bank. Investment experts attributed notable positive investors’ sentiment around the bank to its strong asset base and profitability, pointing out that a two-way test of assets and profitability is the key measure of sustainability for a financial institution.
Buy the dip …it’s Buffett’s philosophy
“If you’re going to be a net buyer of stocks in the future, you should welcome lower prices.” This is the crux of Buffett’s philosophy.
Fidelity Bank’s share price opened this week with a year-to-date return of 18.86 percent, more than double the average capital gain in the banking sector and nearly triple that of the market’s overall average capital gain so far this year.
The NGX Banking Index, which tracks the banking stocks, opened this week with an average year-to-date return of 8.24 per cent while the All Share Index (ASI)- which tracks all share prices at the NGX- opened with a gain of 6.59 percent.
An NGX report shows that a top director of the bank had earlier this week purchased shares worth more than N366 million, in a strategic positioning that increases the top director’s equity stake in the bank.
Consistent in rewarding shareholders…
Fidelity Bank Plc recently paid a final dividend of N1.25kobo per share (December 31, 2023: 85kobo per share) for the 2024 financial year.
The final dividend of N1.25kobo per share and the interim dividend of N0.85kobo per share paid on October 15, 2024, brought the total dividend for the financial year 2024 to N2.10kobo per ordinary share paid from the retained earnings account as at December 31, 2024.
Read also: NGX-ASI dips by 0.10% as investors sell banking stocks
Double-digit profit…
Fidelity Bank had grown its pre-tax profit by 167.8 percent to N106 billion in the first three months of this year, setting the bank on a strong growth trajectory for the year.
Interim report and accounts of Fidelity Bank for the first quarter (Q1) ended March 31, 2025, show that profit before tax (PBT) rose from N39.5 billion in the first quarter of 2024 to N105.8 billion in the first quarter of 2025. Gross earnings rose by 64.2 per cent to N315.4 billion in the first quarter of 2025 as against N192.1 billion in the corresponding period of 2024.
Growth in interest income was primarily led by a 38.6 percent expansion in the earning assets base, while the increase in non-interest revenue came from foreign exchange (forex)-related income, trade and commission on banking services, among others.
According to the bank’s 2024 annual report, available on its website and distributed to shareholders, the bank recorded an impressive 210 percent growth in Profit Before Tax to N385.2 billion. Gross Earnings increased by 87.7 percent to N1.010 trillion, driven by 106.9 percent growth in interest and similar income to N950.6 billion. The bank also witnessed an impressive 47.9 percent growth in deposits from N4 trillion in 2023FY to N5.9 trillion, while Advances grew from N3.1 trillion in 2023FY to N4.4 trillion in 2024FY.
Prioritising next phase of capital raise…
Nneka Onyeali-Ikpe, Managing Director/Chief Executive Officer, Fidelity Bank Plc had told the bank’s shareholders at the bank’s 37th Annual General Meeting (AGM) held virtually on Tuesday, April 29 that, “Our priorities in 2025 financial year are to complete the next phase of our capital raise and further strengthen our asset base, enhance operational efficiency and digital innovation and explore strategic regional expansion into select African markets.”
At that meeting, the bank’s stakeholders were all pleased with the success of the first stage of the capital-raise exercise. The oversubscription of 237.9 percent in the Public Offer and 137.7 percent in the Rights Issue is a testament to the strength of the brand Fidelity Bank and the confidence the investing public has in the bank.
