Nigeria’s top food and consumer goods companies may finally be turning a corner in 2025, offering a breath of fresh air to investors who weathered the economic turbulence of 2024.Â
The year’s first quarter has been marked by improved earnings, lower interest expenses, and a more stable macroeconomic environment, particularly with easing inflation and relative exchange rate stability. Among the industry giants showing signs of recovery are BUA Foods, NASCON, Nestlé Nigeria, Cadbury, and Dangote Sugar. But when it comes to true value, some stand out more than others.
BUA Foods: Solid Performance, But Pricey
BUA Foods started Q1 2025 on a strong note, delivering a pre-tax profit of N136.38 billion. Its earnings per share (EPS) more than doubled to N6.96, driven by a 75% drop in interest expenses and a small reduction in total debt. Its healthy interest coverage ratio and manageable debt-to-asset ratio of 31.5% highlight a company in control of its finances. BUA appears attractive on paper with a market capitalization of N7.52 trillion and a 3.11% dividend yield. However, a relatively high price-to-earnings (P/E) ratio of 22.42x suggests the stock may already be priced for perfection, offering less upside than some of its peers.
NASCON: Undervalued and Financially Lean
NASCON emerged as a quiet outperformer in early 2025. In just three months, it generated an operating profit of N10.42 billion, nearly half its 2024 total. Its EPS jumped to N3.74, reflecting stronger shareholder returns. What makes NASCON stand out is its minimal debt—borrowings dropped 60% to N1.145 billion, and its debt now accounts for just 1.26% of total assets. Interest expenses fell by 41%, and its interest coverage ratio of 49x signals excellent financial health. The stock has surged 72% year-to-date and trades at a modest P/E of 6.66x, making it arguably the best value option for investors looking for growth at a reasonable price. It also offers a higher dividend yield than BUA at 3.70%.
Nestlé Nigeria: A Remarkable Turnaround, but at a Premium
Nestlé Nigeria rebounded strongly from a loss-heavy 2024, posting a Q1 2025 pre-tax profit of N51.6 billion after a prior-year loss of N96.4 billion. The company’s operating profit tripled to N74.15 billion, with EPS at N38.07. Reduced forex losses and lower financing costs were major in this recovery. Despite the positive numbers, Nestlé remains heavily leveraged, with a debt-to-asset ratio of 67%, and its stock trades at a steep P/E ratio of 116x. A 38% rise in share price year-to-date reflects strong investor confidence, but this optimism comes at a steep valuation, limiting potential upside.
Cadbury Nigeria: Recovering, but Still Fragile
Cadbury reported a pre-tax profit of N8.57 billion in Q1 2025, a welcome shift from its full-year 2024 loss of N10.9 billion. Operating profit grew significantly to N9.69 billion, but EPS remains modest at N2.62. While interest expenses declined and coverage improved, borrowings rose slightly, keeping some pressure on the balance sheet. The stock has jumped 86% in 2025, but its negative P/E ratio indicates that markets are still pricing in past losses, making it a risky but potentially rewarding turnaround story.
Dangote Sugar: Climbing Back from the Brink
Dangote Sugar is still in the red, though the Q1 2025 loss of N22 billion significantly improved over the N120 billion loss in the same period last year. However, core operations remain weak, with operating profit down 48% year-on-year. A high borrowing load of N727 billion and rising interest expenses continue to weigh on the company’s recovery. With an interest coverage ratio of just 0.09x, financial strain remains a concern. The 18.77% stock gain in 2025 may reflect hopes of a broader turnaround, but fundamentals remain shaky.
NASCON Stands Out for Value and Stability
Of the five companies reviewed, NASCON more effectively combines financial discipline, growth potential, and market value than its peers. BUA Foods and Nestlé show strong fundamentals but carry hefty valuations. Cadbury and Dangote Sugar are still in recovery mode, with uncertain paths ahead.
