How 23 stocks beat inflation

***6 coys didn’t declare dividend
***7 coys record negative Return On Equity

By Peter Egwatu

Twenty-three stocks quoted on the Nigerian Exchange Limited (NGX) have delivered returns well above Nigeria’s inflation rate so far in 2026, providing investors with significant nominal gains despite a challenging macroeconomic environment.

An analysis of selected companies’ stock performance by Vanguard showed that the strongest performers had posted price appreciation of between about 94 per cent and 365 per cent year-to-date (YtD) as of August 2026, comfortably exceeding the reported average inflation rate of about 15.5 per cent over the period.

The rally, however, has not been uniform. While investors in the leading gainers have enjoyed substantial capital appreciation, several of the stocks carry elevated valuation multiples, while seven companies in the group recorded negative return on equity (ROE), highlighting significant differences in underlying corporate performance.

Zichis, SCOA lead gainers on nominal YtD

As of August 21, 2026, Zichis Agro Allied Industries topped the ranking with a staggering 365.49 per cent year-to-date (YtD) nominal price gain, narrowly ahead of SCOA Nigeria, which rose 365.19 per cent.

They were followed by Union Dicon Salt at 271.09 per cent, RT Briscoe at 241.43 per cent, Infinity Trust Mortgage Bank at 221.43 per cent, Berger Paints Nigeria at 207.50 per cent and Premier Paints at 204 per cent.

First Holdco gained 177.08 per cent, while Vitafoam Nigeria advanced 153.04 per cent and Fortis Global Insurance rose 150 per cent. HBM Nigeria appreciated 149.25 per cent.

Other major gainers included NGX Group at 123.42 per cent, NCR Nigeria at 121.73 per cent, Julius Berger Nigeria at 103.27 per cent, Aradel Holdings at 102.09 per cent, Morison Industries at 101.94 per cent and Initiates Plc at 100.75 per cent.

Completing the group were McNichols at 98.65 per cent, UPDC Real Estate Investment Trust at 97.83 per cent, UACN at 95.44 per cent, May & Baker Nigeria at 94.70 per cent, Zenith Bank at 93.65 per cent and Skyway Aviation Handling Company at 93.56 per cent.

Real returns YtD remains strong

After adjusting the reported gains for inflation, the analysis indicates that the leading stocks still generated substantial positive real returns.

Zichis Agro Allied delivered the highest real gain at 1,379.25 per cent, followed by SCOA Nigeria at 302.8 per cent, Union Dicon Salt at 221.3 per cent and RT Briscoe at 195.61 per cent.

Infinity Trust Mortgage Bank recorded 178.3 per cent, while Berger Paints gained 166.2 per cent in real terms.

First Holdco returned 139.9 per cent, Vitafoam 119.1 per cent, Fortis Global Insurance 116.5 per cent and HBM Nigeria 115.8 per cent.

Other real-return leaders included NGX Group at 93.4 per cent, NCR Nigeria at 91.97 per cent, McNichols at 79 per cent, Julius Berger at 75.9 per cent, Aradel Holdings at 74.9 per cent, Morison Industries at 74.8 per cent, Initiates at 73.8 per cent, UPDC REIT at 71.3 per cent, UACN at 69.2 per cent, May & Baker at 68.6 per cent, Zenith Bank at 67.7 per cent and Skyway Aviation Handling at 67.6 per cent.

The figures underline the scale of capital gains available to investors who entered these stocks early. However, high past returns should not be interpreted as a guarantee of future performance, particularly where valuation multiples have expanded faster than earnings.

Dividends paying companies

Analysis has shown that capital appreciation was not matched by dividend income across the group.

Of the stocks for which dividend-yield data were available, HBM Nigeria offered the highest dividend yield at 6.59 per cent, followed by UPDC REIT at 5.35 per cent, Aradel Holdings at 2.40 per cent and NGX Group at 2.26 per cent.

Infinity Trust Mortgage Bank yielded 1.56 per cent, May & Baker 1.35 per cent, Julius Berger 1.37 per cent, Vitafoam 1.29 per cent, McNichols 1.24 per cent, Berger Paints 1.12 per cent, Initiates 1.12 per cent, Zichis 0.59 per cent, UACN 0.56 per cent and First Holdco 0.46 per cent.

Six companies from the top YtD nominal gainers in price appreciation — SCOA Nigeria, Union Dicon Salt, RT Briscoe, Premier Paints, Fortis Global Insurance and Morison Industries — had no dividend yield because no dividend was declared.

Analysts have noted that investors focused on total returns need to distinguish between capital gains and income returns.

A stock can produce spectacular price appreciation while offering little or no dividend income. Conversely, a lower-growth stock with a stronger dividend yield may appeal more to income-oriented investors.

Some stocks now look expensive

The Price-to-Book (P/B) ratios reveal a wide disparity in how the market values the companies relative to their net assets.

SCOA Nigeria had the highest reported P/B ratio at 24.85 times, followed by Morison Industries at 12.95 times, NCR Nigeria at 12.05 times, UACN at 7.02 times, Vitafoam at 6.91 times, McNichols at 6.59 times and HBM Nigeria at 6.68 times.

Berger Paints traded at 7.90 times book value, Aradel Holdings at 3.96 times, Infinity Trust Mortgage Bank at 3.95 times, Skyway Aviation Handling at 3.60 times, Initiates at 3.08 times and NGX Group at 4.52 times.

At the lower end were Zenith Bank at 0.97 times, UPDC REIT at 1.00 times, First Holdco at 1.66 times and Julius Berger at 1.76 times.

A high P/B ratio does not automatically mean a company is highly leveraged. Rather, it indicates that investors are paying a substantial premium to the company’s accounting net assets, often because of expectations about future profitability, growth, franchise value or asset quality.

Earnings multiples expose valuation risks

The Price-to-Earnings (P/E) ratio presents an even sharper divide.

Morison Industries recorded an exceptionally high P/E of 3,714.29 times, followed by SCOA Nigeria at 92.99 times, NCR Nigeria at 59.03 times, UACN at 39.54 times and Skyway Aviation Handling at 30.68 times.

Berger Paints traded at 24.06 times earnings, Infinity Trust Mortgage Bank at 23.47 times, First Holdco at 20.75 times, NGX Group at 18.50 times, Vitafoam at 16.94 times, Julius Berger at 16.72 times, McNichols at 16.60 times and HBM Nigeria at 15.42 times.

May & Baker traded at 11.71 times, Aradel Holdings at 7.82 times, UPDC REIT at 7.35 times, Initiates at 6.11 times and Zenith Bank at just 4.81 times.

Exceptionally high P/E ratios can signal that investors have already priced substantial future earnings growth into a stock. If earnings fail to catch up with expectations, the share price can come under pressure even when the underlying company remains profitable.

ROE separates strong businesses from speculative rallies

The strongest warning signal in the data comes from return on equity.

Seven companies reported negative ROE. NCR Nigeria recorded the weakest at -6,540.96 per cent, followed by Fortis Global Insurance at -49.2 per cent and SCOA Nigeria at -40.9 per cent.

Morison Industries posted -2.75 per cent, Premier Paints -2.2 per cent, Union Dicon Salt -5.8 per cent, while RT Briscoe also recorded negative ROE.

HBM Nigeria recorded the highest positive ROE at 43.3 per cent, followed by Vitafoam at 39.6 per cent, McNichols at 39.8 per cent, May & Baker at 34.1 per cent, Aradel Holdings at 35.2 per cent, NGX Group at 29.1 per cent, Infinity Trust Mortgage Bank at 26 per cent, Initiates at 25 per cent, Zenith Bank at 20.1 per cent, UACN at 17.4 per cent, UPDC REIT at 13.7 per cent, Skyway Aviation Handling at 11.7 per cent, Julius Berger at 10.5 per cent and First Holdco at 7.56 per cent.

Analysts/operators’ comment

Market analysts and operators opined that some of the price gains did not catch up with fundamentals; hence, they cautioned investors against judging stocks solely by YtD price appreciation.

“The headline gains are impressive, but investors need to separate price momentum from fundamental value creation. A stock that has risen several hundred per cent can still offer value if earnings and cash flows are accelerating, but the risk of a valuation correction becomes higher when price appreciation substantially outpaces underlying fundamentals,” the Managing Director of Highcap Securities Limited, David Adonri, said.

Another analyst stated that the divergence between valuation and profitability is particularly important.

“Some of these stocks have generated extraordinary market returns despite negative or weak returns on shareholders’ equity. That suggests investors should look beyond the price chart and examine earnings quality, debt, cash flow, asset values and the sustainability of the turnaround,” analysts at InvestData Consulting Limited said.

On dividend-paying stocks, analyst and Chief Operating Officer at InvestData Consulting, Ambrose Omordion, said: “The market is currently rewarding capital appreciation more strongly than dividend income in several of these counters. For long-term investors, however, sustainable dividends remain an important component of total return, particularly when share-price momentum eventually normalises.”

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