Nigeria’s consumer goods stocks have recorded a modest 2.99% gain year-to-date, but the sector’s performance tells a more complicated story for investors. Data from the Nigerian Exchange Group (NGX) shows that the sector was the second-worst performing among the exchange’s five sector indices, ahead of only the insurance index. In September, the consumer goods index gained 1.34%, significantly below the 5.37% rise recorded by the broader NGX All-Share Index.
Despite the relatively weak performance, several NGX consumer goods stocks are trading at valuations that require investors to pay more for each naira of earnings. The 19 companies reviewed had a combined market capitalisation of N23.89 trillion as of September 25, representing about 14.6% of the NGX’s total market value of N163.66 trillion. However, the sector added only N328 billion in market value this year, with BUA Foods accounting for more than half of the companies’ combined market capitalisation.
The sector’s overall gain was also affected by sharp declines in some major stocks. BUA Foods lost about N689.4 billion in market value, while International Breweries shed N656.34 billion. On the other hand, Nestlé Nigeria recorded the biggest increase, adding N746.68 billion, followed by Nascon with N218.90 billion and Unilever Nigeria with N218.02 billion. Among the 15 companies with positive earnings, the average price-to-earnings level climbed from about N52 per N1 of earnings at the end of 2025 to N62, indicating that investors are now paying more for profits.
Some stocks illustrate the valuation challenge more clearly. Dangote Sugar, for instance, trades about 26% below its 52-week high but costs investors more than N500 for every N1 of past-year earnings, largely because its earnings over the period remained weak. However, the company reported a significant turnaround in the first half of 2026, recording N41.51 billion in profit compared with a loss in the previous year. Union Dicon has also surged 244.20% this year and is trading around its 52-week high, while investors pay roughly N119 for every N1 of past-year earnings. Champion Breweries and International Breweries also remain relatively expensive based on earnings despite trading well below their yearly highs.
Meanwhile, BUA Foods offers a different picture, trading at roughly N25 for every N1 of past-year earnings, compared with N26 in December. Its first-half profit increased 12% despite a 16% decline in sales, while its N28 dividend for 2025 provided additional support for shareholders. Nestlé Nigeria is also attracting attention after recording 12% growth in first-half sales and a 28% rise in profit, although its valuation has increased from about N14 to N20 per N1 of past-year earnings. Overall, the figures suggest that investors may need to look beyond how far a stock has fallen from its 52-week high and pay closer attention to earnings growth, profitability and future dividends when assessing value in Nigeria’s consumer goods sector.
source: nairametrics