How to Research an NGX Stock
A share price tells you what a stock costs. It does not tell you what the business is worth. To answer that second question, you need a repeatable research process: understand the company, read its results, test the quality of its earnings, compare its valuation with similar companies, and decide what could prove your conclusion wrong.
This guide walks through that process using Guaranty Trust Holding Company (GTCO) as a real example. GTCO is useful because it is widely followed, pays dividends, publishes detailed reports and sits among several comparable NGX banks. The purpose is not to recommend GTCO. It is to show you how to investigate any Nigerian stock without relying on tips, social-media excitement or price movement alone.
The research question: not “Will GTCO go up?” but “What business am I buying, what do its numbers say, what expectations are already in the price, and what risks could damage the thesis?”
Start with a one-page research sheet
Before opening ten browser tabs, create a simple sheet with nine headings. You will fill it as you work.
| Section | What you are trying to establish |
|---|---|
| Business | How the company makes money |
| Financial trend | Whether revenue, profit and cash generation are improving |
| Balance sheet | Whether growth is being funded safely |
| Per-share results | What belongs to each share you own |
| Dividends | Whether payments are affordable and repeatable |
| Valuation | What the market price implies |
| Peers | Whether the stock is cheap or expensive for a reason |
| Catalysts and risks | What could change the market's view |
| Decision | Your thesis, required return and reasons to walk away |
Understand the business before studying the stock
Write down what the company sells, who pays it, where it operates and what determines its profit. A cement producer, bank and telecom company should not be analysed with the same checklist.
GTCO is a financial holding company. Its largest engine is banking, while the group also operates payments, pension and funds-management businesses. For a bank, the important drivers include interest earned on loans and securities, interest paid to depositors, fee income, credit losses, operating costs and the amount of capital supporting the balance sheet.
Your first warning sign is being unable to explain the business in two sentences. If you do not know where the money comes from, every ratio that follows will be decoration.
Collect primary documents
Start with the company's latest audited annual report, then read the newest interim result and every material announcement published after it. Audited accounts give you the fullest picture; interim accounts tell you whether that picture is changing.
For GTCO, the core document is its 2025 annual report. You should also check Kobo Terminal disclosures for results, dividend announcements, board changes, capital raises and other price-sensitive filings. Do not build a thesis from a press headline when the underlying filing is available.
Document order
1. Latest audited annual report
2. Latest quarterly or half-year report
3. Results presentation and management commentary
4. Material disclosures since the reporting date
5. Reports from at least two comparable companies
Build a three-to-five-year financial trend
One year can flatter or punish a company for temporary reasons. Record at least three years of the same metrics and calculate the direction, not merely the latest value.
GTCO's audited 2025 figures provide a useful lesson:
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Gross earnings | ₦2.150tn | ₦2.148tn | Broadly flat |
| Profit before tax | ₦1.231tn | ₦1.266tn | -2.8% |
| Profit after tax | ₦865.7bn | ₦1.018tn | -14.9% |
| Basic EPS | ₦25.43 | ₦35.44 | -28.2% |
| Total dividend per share | ₦12.76 | ₦8.03 | +58.9% |
The immediate conclusion is not simply “profit fell.” Gross earnings held steady and pre-tax profit declined modestly, but profit after tax and EPS fell much faster. That gap tells you to investigate taxation, one-off gains and the quality of the prior year's earnings. GTCO attributed the sharper after-tax decline partly to fiscal changes affecting the taxation of investment securities.
This is why the trend matters: a headline can show a lower profit while the underlying banking lines improve, or a higher profit while a one-off currency gain hides weak core operations.
Separate recurring earnings from one-offs
Ask how much of profit came from activities likely to repeat. For a bank, compare net interest income, fee and commission income, trading or fair-value gains, impairment charges and operating expenses.
In GTCO's case, 2024 included unusually large fair-value gains that did not recur at the same level in 2025. A mechanical comparison therefore makes 2025 look weaker without telling you whether core interest and fee income improved. Your job is to bridge reported profit to sustainable profit.
Use three labels beside every large income line: recurring, cyclical or one-off. Valuation based on a temporary windfall can make a stock appear cheaper than it really is.
Check the balance sheet and bank-specific risks
For an industrial company, you would study debt, inventory, receivables and operating cash flow. For a bank such as GTCO, focus on asset quality and capital:
- Non-performing loan ratio: how much of the loan book is impaired?
- Cost of risk: how much profit is being consumed by expected credit losses?
- Capital adequacy ratio: how large is the buffer above the regulatory minimum?
- Loan-to-deposit ratio: is growth supported by stable funding?
- Liquidity ratio: can the bank meet withdrawals and near-term obligations?
- Foreign-currency exposure: how would another naira move affect assets, liabilities and capital?
Never compare a bank's debt-to-equity ratio with a manufacturing company's and call the bank overleveraged. Deposits are part of a bank's operating model. Use sector-appropriate measures.
Translate the accounts into per-share value
You buy shares, not the entire income statement. Track earnings per share, book value per share and dividend per share. Also check whether the share count is rising: a company can grow total profit while each shareholder's slice shrinks.
GTCO reported basic EPS of ₦25.43 for 2025. Against Kobo Terminal's ₦132.70 market price on 6 September 2026, the simple trailing price-to-earnings calculation is:
P/E = Share price ÷ EPS = ₦132.70 ÷ ₦25.43 ≈ 5.2×
That means the price is roughly 5.2 times the latest audited annual earnings per share. It does not automatically mean “cheap.” The market may expect earnings to fall, consider part of the earnings unsustainable, demand a high return for Nigerian macro risk, or apply a discount for governance and liquidity. A low multiple is a question to investigate, not an answer.
Test the dividend instead of chasing the yield
GTCO's total dividend for 2025 was ₦12.76 per share, up from ₦8.03. At ₦132.70, the backward-looking cash yield is approximately:
Dividend yield = DPS ÷ Price = ₦12.76 ÷ ₦132.70 ≈ 9.6%
Now test whether it is sustainable. The 2025 payout was about half of reported EPS, leaving part of earnings inside the business. For a bank, you must also ask whether capital requirements, loan growth or a regulator's decision could limit future distributions. Compare the yield with inflation, Treasury-bill yields and the return you require for equity risk. A 9.6% nominal yield can still be unattractive if safer instruments yield more or inflation erodes the income.
Compare GTCO with genuine peers
Open the GTCO stock page and compare it with Zenith Bank, UBA, Stanbic IBTC, Access Holdings and First HoldCo. Use the same reporting period and accounting definitions.
Compare P/E, price-to-book, dividend yield, return on equity, asset quality, capital adequacy, earnings mix and multi-year growth. If GTCO commands a higher valuation than a peer, ask what investors are paying for: stronger profitability, cleaner assets, better capital, more reliable dividends or simply a more popular name. If it trades at a discount, find the risk responsible before calling it an opportunity.
Read the price chart last
Price history matters, but it should test your work rather than lead it. As of 6 September 2026, Kobo Terminal showed GTCO at ₦132.70, a market capitalisation of ₦4.85tn, a 52-week range of ₦77.50 to ₦156.95, and a one-year price change of approximately +44.2%.
That tells you the stock had already risen substantially and was trading below its 52-week high. It does not tell you whether the next move is up or down. Compare the price move with the change in EPS, book value and dividends. If price rose faster than fundamentals, future returns require stronger results or a higher valuation multiple.
Write the thesis and the reasons it could fail
Finish with a short decision memo. Do not write “good company” or “price will rise.” Make the statement testable.
Example research conclusion—not a recommendation
Possible case: GTCO combines high reported profitability, a material dividend and a low trailing earnings multiple. Returns could be supported if core interest and fee income continue growing, credit quality remains controlled and the dividend is sustained.
What could break it: weaker earnings after the fading of one-off gains, higher impairments, regulatory or tax changes, naira volatility, capital constraints, or a valuation that stays low despite good results.
Evidence required: improving recurring income, acceptable asset-quality metrics, adequate capital, stable per-share earnings and a dividend funded by earnings rather than balance-sheet strain.
Set the conditions that would make you sell or refuse to buy before emotion enters the decision. Revisit them when new results arrive.
A reusable NGX stock research checklist
- Can I explain the business and its profit drivers in two sentences?
- Have I read the latest annual report and newest interim result?
- Do I have at least three years of revenue, profit, EPS and dividend data?
- Have I separated recurring earnings from one-off gains?
- Am I using the right balance-sheet metrics for this sector?
- Has the number of shares increased or decreased?
- Can earnings and capital comfortably support the dividend?
- How does the valuation compare with genuine peers?
- What expectations appear to be priced in already?
- What three events would prove my thesis wrong?
Common mistakes Nigerian investors make while researching
- Starting with a price target: this encourages you to select only evidence that supports the number.
- Using one year's profit: cycles and one-offs can completely distort the picture.
- Comparing unrelated sectors: a bank, brewer and oil producer require different operating metrics.
- Confusing a high dividend with a safe dividend: the next payment matters more than the last one.
- Ignoring per-share dilution: total profit growth may not reach existing shareholders.
- Treating analyst consensus as certainty: recommendations are inputs, not substitutes for your own thesis.
- Ignoring liquidity: the quoted price may not be available for the size you want to buy or sell.
Frequently asked questions
Where can I find Nigerian company financial statements?
Start with the company's investor-relations website and its official NGX disclosures. Kobo Terminal collects searchable company disclosures at koboterminal.com/disclosures.
Which ratios are most useful for researching an NGX bank?
Use P/E and price-to-book alongside return on equity, net interest margin, cost-to-income, non-performing loans, cost of risk, capital adequacy and dividend payout. No single ratio is enough.
Does a low P/E mean an NGX stock is undervalued?
No. A low P/E may indicate undervaluation, but it can also reflect falling earnings, weak governance, poor liquidity, macroeconomic risk or profits that may not recur. Compare the company with its own history and close peers.
How often should I update my stock research?
Review the thesis after every result, material disclosure, dividend announcement or major regulatory change. Update the valuation whenever the share price or earnings outlook changes materially.
Research the example yourself
Open GTCO's live page for its price chart, performance, sector peers, disclosures, dividends and valuation metrics.
Research GTCO on Kobo TerminalSources and data notes
- Guaranty Trust Holding Company Plc — 2025 Annual Report
- Kobo Terminal — GTCO stock page, market data snapshot dated 6 September 2026
- Kobo Terminal — NGX company disclosures