NGC

I published a post yesterday analyzing RT Briscoe and I have decided to work on Nigerian German Company (NGC) today. I am in the process of determining which one will be a better buy for the long term; a stock that I will not have to trade, a stock that I will have on my portfolio permanently and that ultimately means that I am looking for a company that has a steady growth rate despite all the harsh economic and sometimes politically volatile Nigerian situation.

If the company has been able to withstand all the stress of working in Nigeria over the past decade or so, they are already well positioned to capitalize on the steady growth Nigeria is about to experience given economic analysts opinions. RT Briscoe will definitely maximize on the steadily expanding middle class group in Nigeria and NGC will also exploit the increasing industrial activities, which is ultimately built around the middle class in the long run.

I am presently just doing a brief financial analysis of both companies to know which one has done better over the past one year. Ironically, the prices of both companies slid today on the NSE.

NGC is under the Chemical and Paints sector, which also include African Paints, Berger Paints, CAP Plc, DN Meyer, IPWA and Premier Paints. They released their 9 months results for the period ending September 2007 on the floor of the NSE in January this year. They grew their turnover by 6.8% from N1.982 billion to N2.117 billion while their profit before tax increased by 24.5% from N166.140 million to N206.822 million. After tax profits rose from N116.298 million to N144.775 million indicating a 24.5% increase. Based on the 3rd quarter results returns on equity rose from 1.51 to 1.88.

Their projected earning per share for the full year financials will come to about 94K which indicates their forward price earning to be around 29.10. Jeez… now that is pretty high.

It will be pretty difficult to determine which company is better at this point considering the fact that NGC is yet to release their full year results, which for me is a minus on their part. RT Briscoe is more shareholder friendly than NGC; that is the only conclusion I have been able to draw for now.

I will wait patiently for NGC to release their results and then I will be able to have an idea of which company I will develop a bias for. So for now, I have to keep my fingers crossed and wait while I look for more information from RT Briscoe.