ZENITH BANK PLC
Stocks/Nigeria/Banks/NGSE:ZENITHBANK

Market Capitalisation: ₦530.6b
Data Last Updated: 09Sep2020 @ 00:38 UTC
Data Sources: Company Financials +

ANALYSIS
Price to Earnings Ratio: 2.4x (below NG market of 6.2x).
Earnings growth: 16.4% per year over past 5 years.
Risk Analysis: High level of non-cash earnings; Unstable dividend track record.
Snowflake Analysis Summary: Established dividend payer with adequate balance sheet.

Share Price: No significant volatility in past 3 months.
Market Performance:
7 Day Return @ -0.3% vs -1.1% for NG Banks vs 0.2% NG Market.
1 Year Return @ -7.4% vs -10.5% NG Banks vs -11.9% NG Market.

Return vs Industry: ZENITHBANK matched NG Banks, which returned -7.9% over the past year.
Return vs Market: ZENITHBANK exceeded NG Market, which returned -11.4% over past year.

SHAREHOLDER RETURNS:
ZENITH vs Industry vs Market
7 Day -0.3% -1.1% 0.2%
30 Day 0.6% -0.3% 0.9%
90 Day 1.5% -3.6% -0.9%
1 Year 8.6%-7.4% -0.2%-10.5% -4.1%-11.9%
3 Year 8.7%-25.7% -16.0%-32.8% -33.0%-43.8%
5 Year 84.5%-4.8% 22.0%-14.3% -17.2%-36.1%

VALUATION (SHARE PRICE VS FAIR VALUE):
Vs Fair Value: ZENITHBANK (NGN16.9) is trading above our estimate of fair value (NGN11.58)
Vs PE Ratio (Industry): ZENITHBANK is good value based on PE Ratio 2.4x vs NG Banks avg of 2.9x.
Vs PE Ratio (Market): ZENITHBANK is good value based on PE Ratio 2.4x vs NG market 6.2x.
Vs Price to Earnings Growth Ratio: ZENITHBANK is good value based on PEG Ratio 0.9x.
Vs Price to Book Ratio (Industry): ZENITHBANK is overvalued based on PB Ratio 0.5x vs NG Banks avg 0.4x.

FUTURE EARNINGS GROWTH FORECAST
Growth in 1 to 3 years: 2.7% per year
Earnings vs NG Market: Slower, @ 2.7% vs 14.5% per year.
High Growth Earnings: ZENITHBANK's earnings are forecast to grow, but not significantly.
Revenue vs NG Market: Slower, @ 6.5% vs 7.5% per year.
Future Return on Equity: High in 3 years time (20%).

PAST PERFORMANCE
Over the past 5 years: 16.4%
Quality Earnings: High level of non-cash earnings.
Growing Profit Margin: Current net profit margins (46%) are higher than last year (43.3%).
Earnings Trend: Grew by 16.4% per year over the past 5 years.
Accelerating Growth: Lower over the past year (11.6%) vs 5-year average (16.4% per year).
Earnings vs Industry: Lower over the past year 11.6% vs NG Banks 16.3%.
Return on Equity: High (22.6%).

FINANCIAL HEALTH
Asset Level: Low Assets to Equity ratio (7.7x).
Allowance for Bad Loans: Low (83%).
Risk Liabilities: Low (74% are primarily low-risk sources of funding).
Loan to Assets Ratio: Appropriate (36%).
Risk Deposits: Appropriately low (Loans to Deposits ratio 55%).
Bad Loans Level: High (7.4%).

DIVIDEND
Current dividend yield: 16.57%
Upcoming Dividend Payment: Interim.
Ex Dividend Date: 17 Sep 2020.
Dividend Pay Date: 22 Sep 2020.
Dividend Yield vs Market: Higher @ 16.57% than bottom 25% of dividend payers in NGmarket (4.31%).
Dividend Yield Rating: Good. Higher @ 16.57% than top 25% of dividend payers in the NGmarket (11%)
Dividend Stability: Volatile in the past 10 years.
Dividend Growth: Increased over the past 10 years.
Dividend to Earnings Coverage: Well covered, @ 39.3% earnings payout ratio.
Future Dividend to Earnings Coverage: Well covered, @ 44.4% forecast payout ratio in 3 years.

KEY COMPANY INFORMATION
Name: Zenith Bank Plc
Ticker: ZENITHBANK
Exchange: NGSE
Founded: 1990
Industry: Diversified Banks
Sector: Banks
Market Cap: ₦530.601b
Shares outstanding: 31.40b
Website: https://www.zenithbank.com

SOURCE (abridged): https://simplywall.st/stocks/ng/banks/ngse-zenithbank/zenith-bank-shares