The Nigerian Exchange (NGX) went on a turbo-charged run in July, rallying more than 22 percent between July 1 and August 7. By that day, the All-Share Index had stormed to a record 146,570.71 points, a peak that seemed to defy gravity.
But markets rarely stay euphoric for long. The rally quickly unraveled as profit-taking swept through the bourse, wiping out about N3.95 trillion in market capitalization between August 7 and 21. The initial surge was powered by stocks that dazzled investors with strong half-year earnings, sending their share prices far beyond analyst targets.
With the dust settling, a different picture is emerging. Some equities, including reliable dividend payers, are trading at levels that appear to undervalue their fundamentals. In this piece, BusinessDay spotlights a handful of such stocks, some of which are already rewarding shareholders with interim dividends. The story offers a case for investors to look beyond the recent selloff.
Custodian Investment
Custodian Investment Plc closed trading on August 22 at N40.75 per share, reflecting a modest price-to-earnings (P/E) multiple of 4.65x. This is despite the stock having already surged 138 percent year-to-date, underscoring that the market may still be undervaluing the group relative to peers.
Among Nigeria’s diversified conglomerates, the contrast is striking. UACN trades at a P/E of 16.80x, almost four times Custodian’s valuation, while Transcorp commands a P/E of 5.89x. Even when placed alongside insurance peers, Custodian’s discount becomes apparent: the stock is priced lower than Cornerstone Insurance, Consolidated Hallmark, and AIICO Insurance, all of which carry higher earnings multiples despite smaller footprints.
Valuation signals from the balance sheet further reinforce the case for undervaluation. Custodian’s EBITDA/EV ratio stood at 0.17 in the first half of 2025, a level that suggests the company generates robust operating earnings relative to its enterprise value. By comparison, Cornerstone Insurance posts a ratio of just 0.05, highlighting Custodian’s superior ability to convert its business scale into value.
For investors, the numbers point to a financial conglomerate whose true fundamentals are not yet fully captured in its share price. Custodian’s portfolio, spanning one of Nigeria’s largest pension fund administrators, a diversified insurance business, and a property development arm, sits on assets of more than N456 billion. Yet, with a market valuation of less than N240 billion, the current pricing hardly reflects the depth and scale of the group’s operations.
Aradel Holdings
Aradel Holdings closed the first half of 2025 with a net cash position of over N213 billion. That volume of cash is a financial firepower that makes the group’s expansion drive look almost effortless.
The upstream petroleum producer reported N146.4 billion in net income in H1 2025, a robust 40 percent year-on-year growth from the same period in 2024. On profitability metrics, Aradel delivered a Return on Average Equity (ROAE) of 10.5 percent, well ahead of Seplat’s 1.5 percent in the same period. The relatively modest ROAE is largely a reflection of Aradel’s extreme reliance on equity financing. Stripped of that capital structure effect, its Return on Assets (ROA) of 10.2 percent underscores the company’s heavy net asset position.
When it comes to liquidity, Aradel stands apart. While Seplat’s net debt-to-EBITDA ratio came in at 0.53x, Aradel’s ratio was negative. It was negative because Aradel is in negative net debt position, a liquidity position unmatched by any other upstream oil company listed on the NGX.
Valuation further sharpens the contrast. At a share price of N519, Aradel trades at a price-to-earnings multiple of just 7.8x, barely a quarter of Seplat’s 28.5x. For investors, the numbers tell the story of a highly profitable, cash-rich oil company that the market may still be undervaluing relative to its peers.
Lafarge Africa
In 2025, Lafarge Africa has emerged as one of the standout performers on the Nigerian Exchange, delivering a year-to-date gain of about 92 percent. This sharp rally comes less than a year after Holcim AG, the parent company, announced plans in December 2024 to divest its 83 percent stake in a transaction that valued Lafarge at around $1 billion.
Since then, market sentiment has dramatically shifted. Lafarge’s market capitalisation has climbed well above that benchmark, currently hovering around $1.44 billion. Yet, despite this surge, analysts suggest there is still considerable upside, supported by the company’s latest financial results for the first half of 2025.
On valuation metrics, Lafarge Africa continues to trade at a discount relative to its larger rivals. The stock’s price-to-earnings (P/E) ratio of 8.3x lags BUA Cement at 15.79x and Dangote Cement at 9.39x. Even more striking is Lafarge’s enterprise value-to-EBITDA (EV/EBITDA) multiple of 9.55, significantly lower than BUA’s 22.55 and Dangote’s 24.59. In effect, investors are paying far less for every naira of Lafarge’s earnings, despite the company demonstrating stronger balance sheet resilience.
Lafarge’s liquidity position further underlines its strength. The cement maker ended the first half of 2025 with a net cash position of over N208 billion. By contrast, Dangote Cement carried a net debt load of N2.15 trillion, while BUA Cement reported N385 billion in net debt. This financial flexibility not only provides Lafarge with a buffer against market volatility but also positions it strategically for growth opportunities even as its competitors remain more leveraged.
NASCON
NASCON, the Dangote-owned salt producer, stands out on valuation grounds when compared with other listed consumer goods companies in Nigeria. The stock trades at a price-to-earnings (P/E) ratio of 7.94x—well below Unilever’s 24.84x and Nestlé’s 14.94x, and only slightly above Cadbury’s 7.01x.
This relative undervaluation comes despite NASCON’s strong track record of profitability. In 2024, many consumer goods companies were weighed down by massive foreign exchange losses. NASCON, however, delivered a net income of N15.6 billion, the highest in its sector on the Nigerian Exchange (NGX). Remarkably, the company has already matched that performance just six months into 2025, reporting another N15.6 billion in net income for the first half of the year.
The company’s return on average equity (ROAE) of 32.4 percent in H1 2025 underscores its efficiency in generating value for shareholders. Backed by a robust cash position, NASCON is well-positioned to finance future expansion without relying heavily on debt.
At its current price of N90 per share, the stock looks poised for further upside and could easily push past the N100 mark if current momentum and earnings strength persist
