Financial Performance

United Capital Plc has seen steady growth in both top and bottom lines over the years, and we expect both to continue to grow at double digits over the next five years. The company’s Return on Equity (ROE) has averaged over 30% in the past 5 years. This is one of the highest among publicly listed financial service companies and highlights the company’s strong value creation for its shareholders. We recommend a buy for the stock based on our findings and the future prospects of the company. Our blended target price of N15.10 suggests a potential upside of 20.8% compared to the current share price of N12.50 (24th October, 2022). The target price was arrived at by using a weighted average of 65% for the DDM method and 35% for the comparable method of valuation.

The company also has the following market value ratios:

P/E ratio: 6.7X (FY-21 EPS: N1.88)
Forward P/E: 5.2X (FY-22 EPS: N2.41)
Dividend yield: 12% (last dividend reported: N1.50)
P/B ratio: 2.55X (Book value: N4.9)