United Capital Plc has emerged as one of the most financially resilient institutions on the Nigerian Exchange (NGX) in recent years, delivering a steady streak of double-digit profit growth and strong balance sheet fundamentals. Yet, despite these impressive numbers, investor sentiment toward the stock has remained surprisingly restrained.
Between 2020 and 2024, the financial services group achieved a compound annual growth rate (CAGR) of 63% in profit, translating to a cumulative N56.43 billion in earnings. The momentum intensified in 2024, when profit jumped by more than 111%, setting the stage for another robust year in 2025.
For the first half of 2025, United Capital reported a 54% year-on-year increase in profit after tax to N11.9 billion. Earnings per share grew by 53.5% over the same period, supported by a 57% surge in gross earnings to N23.76 billion. Fees and commissions contributed over 64% of the top line in the second quarter, while operating profit climbed to N6.5 billion, buoyed by revenue growth and disciplined cost management.
Group Chief Executive Officer, Peter Ashade, credited the company’s resilience and execution strength, noting that United Capital “ended the first half of the year on a strong and positive note, continuing our track record of excellence and strong financial performance despite prevailing macroeconomic challenges and market volatility.”
However, the company’s share price has not mirrored this operational success. The stock, which began 2025 at N20.40 per share, has lost about 8.3% of its value, placing it among the weaker year-to-date performers on the NGX. In 2024, it also fell by 11%. This decline comes despite the stock’s stellar long-term record—rising from just N0.80 in 2020 to over N20 by 2024.
This mismatch between financial performance and market valuation has fueled debate about whether United Capital is an undervalued gem or a stock in need of renewed investor confidence.
Valuation and Growth Signals
At a price-to-earnings (P/E) ratio of 11.91x and a price-to-sales (P/S) ratio of 1.40x, United Capital’s valuation appears modest compared to its growth profile. With a market capitalization of N337 billion against net assets of N166.9 billion and total assets of N1.586 trillion, the numbers point to solid financial backing.
When adjusted for growth using the price/earnings-to-growth (PEG) ratio—estimated between 0.19 and 0.22, well below the benchmark of 1—the data suggest the stock may be significantly undervalued relative to its earnings potential.
Balance Sheet and Liquidity Picture
The company’s managed funds increased to N923 billion from N847 billion, underscoring continued investor trust—a critical pillar of United Capital’s business model. But beneath the profit surge lies a more complex liquidity story.
United Capital reported a negative operating cash flow of N119 billion in the first half of 2025, largely due to working capital pressures. For a firm that thrives on fund mobilization and asset management, this reversal could raise eyebrows among cautious investors.
Shareholder Rewards and Outlook
Despite the liquidity headwinds, the group maintained its dividend commitment, declaring an interim payout of N0.30 per share—equivalent to a 45% payout ratio. This move reinforces management’s confidence in its earnings stability, even as market perception remains muted.
In essence, United Capital Plc stands at an intriguing crossroads. Its profitability is accelerating, valuations are appealing, and its fundamentals remain intact. Yet, the market’s hesitance persists, suggesting that investors may still be weighing short-term liquidity concerns against long-term growth prospects.
Whether the market eventually rewards United Capital’s consistency—or continues to discount its earnings momentum—will be one of the key stories to watch on the NGX in the months ahead.