Fidelity Bank: When Strong Numbers Support Possible High Payout, Price Rally

Fidelity Bank Plc recently presented an impressive 2019Q4 unaudited financials, arising from improved risk management which may support higher dividend payout, as will be confirmed by in the expected full-year audited scorecard.
This is also noticeable in its 4.8% Non-Performing Loan ratio, which is below the 5% regulatory threshold and has been successfully brought down from 5.70% in the corresponding full-year of 2018. This is despite the increase in total loan book by 26%, as the bank’s 92% Loan to Deposit Rate, which is significantly above the Central Bank of Nigeria’s 65% benchmark, leading other banks in the industry.
Fidelity Bank’s price action is currently trading 20-Day Moving Average on a daily and weekly time frame.
The stock started its recent rally mid-September 2019 to remain above the 20-DMA, which placed it in a buy range of N1.79 to N2.22, on the expected full-year earnings report.

There is a huge potential for banking stocks, and indeed, the nation’s stock market, with recovery insight over the coming weeks and months, especially as investors analyze the implications of the 2.55% 2019Q4 GDP, beating market projections.
Fidelity Bank’s share price looks attractive for any portfolio in the short to long-term, given that the stock is ready to reverse upward after this pullback because it has formed a cup and handle chart pattern that supports an uptrend. Investors should watch closely to take the position before the bank’s numbers finally hit the market.

According to Fidelity Bank’s historical data, its average dividend payout ratio over the last five years has been 26.92%, even as the full-year Earnings Per Share according to the unaudited Q4 stood at N1.02 each. The expected dividend is projected to be in the region of between N0.18 and N0.25 on a Price to Earnings Ratio of 2.08x, and Earnings Yield of 48.19%.

This was discussed extensively as part of the 10 golden stocks during the Invest 2020 Traders & Investors Summit held in Lagos last December.
Also, traders and investors need to change their strategies, because of the NSE’s pricing methodology, the CBN directives and their impact on the economy in the nearest future.
Meanwhile, the Investdata team welcomes you to a bullish 2020. The home study packs of Invest 2020 Opportunities and Trade Ideas Summit containing the 10 Golden Stocks for 2020 are available. To obtain your pack send ‘Yes’ or ‘Stock’ to 08028164085, 08032055467, 08111811223 now.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
https://investdata.com.ng/2020/02/fidelity-bank-when-strong-numbers-support-possible-high-payout-price-rally/