UBA’s earnings per share (EPS) saw significant growth, reaching N12.93 for the nine months, a 294% increase year-on-year, and a trailing twelve-month EPS of N14.49. Q3 alone registered an EPS of N3.27, marking a 108.28% growth over the period.
With a year-to-date share price gain of 173%, the share price outpaces earnings, reflecting strong investor sentiment.
Currently, UBA’s stock offers an attractive dividend yield of 6.75%, higher than the average peer dividend yield of 4.5%. This implies that, based on the current stock price, investors could potentially earn a return of 6.75% through dividends.
United Bank For Africastock is currently priced attractively compared to its industry peers. With a Price-To-Earnings Ratio (P/E) of 1.4x, well below the peer average of 4.02x. Additionally, the price-to-sales ratio of 0.30 indicates a market perception of undervaluation, reinforcing the idea that UBA’s stock is considered underpriced relative to its revenue.
With a strong return to shareholders highlighted by the bank’s impressive return on average equity and a robust total return of 179.75% represented by the combination of share price year-to-date gain and dividend yield, UBA appears as a compelling investment opportunity.
To sustain this appeal, United Bank For Africa must continue to be resilient and committed to delivering value and enhancing the confidence of its customers, stakeholders and the wider public, notwithstanding the competitive landscape and current global trend in the industry.
By Lekan Olofinsusi