Stock Analysis- Dangote Cement: The Backbone of Nigeria’s Cement Industry
- Posted on January 09, 2025
- Stock Market
- By Samiat
Stock Analysis- Dangote Cement: The Backbone of Nigeria’s Cement Industry
Company Overview
Industry: Production and Sale of Portland Cement
Ticker Symbol: DANGCEM
Listing Date: October 26, 2010
ISIN: NGDANGCEM008
Market Leadership:
• Market Capitalization: NGN 8.16 trillion
• Represents 12.8% of the Nigerian Stock Exchange’s equity market.
• Stock Price: NGN 478.80
• Shares Outstanding: 17 billion
Dangote Cement Plc is a Nigerian multinational cement manufacturer headquartered in Lagos and a subsidiary of the Dangote Group. It is the most valuable company on the NGX and the largest company by market capitalization.
History and Operations
• Founded: 1992 as Obajana Cement Plc, renamed Dangote Cement Plc in July 2010.
• Founder: Aliko Dangote, with cement making up about 80% of Dangote Group’s business.
• Production Capacity: 52.0 million tonnes per year, with plants or import terminals in Nigeria and nine other African countries.
• Scope: Dangote Cement leads Sub-Saharan Africa in cement production.
2024 Q3 Financial Performance
• Total Revenue: NGN 800.52 billion
• Gross Profit: NGN 391.01 billion
• Operating Income: NGN 191.69 billion
• Net Income: NGN 88.64 billion
• EPS (Earnings Per Share): NGN 26.96
• Dividend: NGN 30 per share (paid May 31, 2024)
• Dividend Yield: 6.27%
Balance Sheet:
• Total Assets: NGN 5.54 trillion
• Total Liabilities: NGN 3.37 trillion
Technical Insights
• Stock Rating:
• Mixed signals for short-term trading (some indicators suggest a sell).
• Favorable outlook for long-term investors (neutral to buy).
• Price Target Forecast:
• Average: NGN 462.6
• Range: NGN 385.9 to NGN 532.3 (over a 12-month period).
Strengths
1. Market Dominance: Largest cement producer in Sub-Saharan Africa.
2. Efficient Operations: Cost-effective production due to proximity to natural resources.
3. Dividend Payouts: Attractive annual dividends, boosting investor confidence.
Weaknesses
1. Market Concentration: Heavy reliance on Nigerian operations.
2. Geographic Limitations: Predominantly focused on Africa, limiting global reach.
Opportunities
1. Growing Cement Demand: Infrastructure development across Africa.
2. Energy Efficiency: Transition to cleaner energy sources through partnerships.
3. Market Expansion: Potential to enter new regions outside Africa.
Threats
1. Economic Instability: Vulnerable to Nigeria’s economic fluctuations.
2. Regulatory Risks: Potential impact of stringent regulations in operating countries.
3. Competition: Increasing presence of global players in the African cement market.
Recent Developments (2024–2025)
Key Achievements
1. Financial Growth: 69.1% increase in group revenue and a 37.1% increase in EBITDA in Q3 2024.
2. Production Expansion: Target to produce 61 million tonnes of cement by the end of 2024.
Corporate Social Responsibility
• Bursary Payments: Doubled to NGN 22,800 for host communities in Benue State.
Sustainability Initiatives
• CNG Partnership: Collaboration with Tetracore Energy for Compressed Natural Gas (CNG) to power logistics operations, supporting Nigeria’s clean energy goals.
Conclusion
Dangote Cement remains a cornerstone of Nigeria’s industrial sector and a critical player in Africa’s cement market. With robust financials, strategic initiatives, and strong market presence, it holds immense potential for long-term growth while presenting exciting opportunities for investors.
Company Overview
Industry: Production and Sale of Portland Cement
Ticker Symbol: DANGCEM
Listing Date: October 26, 2010
ISIN: NGDANGCEM008
Market Leadership:
• Market Capitalization: NGN 8.16 trillion
• Represents 12.8% of the Nigerian Stock Exchange’s equity market.
• Stock Price: NGN 478.80
• Shares Outstanding: 17 billion
Dangote Cement Plc is a Nigerian multinational cement manufacturer headquartered in Lagos and a subsidiary of the Dangote Group. It is the most valuable company on the NGX and the largest company by market capitalization.
History and Operations
• Founded: 1992 as Obajana Cement Plc, renamed Dangote Cement Plc in July 2010.
• Founder: Aliko Dangote, with cement making up about 80% of Dangote Group’s business.
• Production Capacity: 52.0 million tonnes per year, with plants or import terminals in Nigeria and nine other African countries.
• Scope: Dangote Cement leads Sub-Saharan Africa in cement production.
2024 Q3 Financial Performance
• Total Revenue: NGN 800.52 billion
• Gross Profit: NGN 391.01 billion
• Operating Income: NGN 191.69 billion
• Net Income: NGN 88.64 billion
• EPS (Earnings Per Share): NGN 26.96
• Dividend: NGN 30 per share (paid May 31, 2024)
• Dividend Yield: 6.27%
Balance Sheet:
• Total Assets: NGN 5.54 trillion
• Total Liabilities: NGN 3.37 trillion
Technical Insights
• Stock Rating:
• Mixed signals for short-term trading (some indicators suggest a sell).
• Favorable outlook for long-term investors (neutral to buy).
• Price Target Forecast:
• Average: NGN 462.6
• Range: NGN 385.9 to NGN 532.3 (over a 12-month period).
Strengths
1. Market Dominance: Largest cement producer in Sub-Saharan Africa.
2. Efficient Operations: Cost-effective production due to proximity to natural resources.
3. Dividend Payouts: Attractive annual dividends, boosting investor confidence.
Weaknesses
1. Market Concentration: Heavy reliance on Nigerian operations.
2. Geographic Limitations: Predominantly focused on Africa, limiting global reach.
Opportunities
1. Growing Cement Demand: Infrastructure development across Africa.
2. Energy Efficiency: Transition to cleaner energy sources through partnerships.
3. Market Expansion: Potential to enter new regions outside Africa.
Threats
1. Economic Instability: Vulnerable to Nigeria’s economic fluctuations.
2. Regulatory Risks: Potential impact of stringent regulations in operating countries.
3. Competition: Increasing presence of global players in the African cement market.
Recent Developments (2024–2025)
Key Achievements
1. Financial Growth: 69.1% increase in group revenue and a 37.1% increase in EBITDA in Q3 2024.
2. Production Expansion: Target to produce 61 million tonnes of cement by the end of 2024.
Corporate Social Responsibility
• Bursary Payments: Doubled to NGN 22,800 for host communities in Benue State.
Sustainability Initiatives
• CNG Partnership: Collaboration with Tetracore Energy for Compressed Natural Gas (CNG) to power logistics operations, supporting Nigeria’s clean energy goals.
Conclusion
Dangote Cement remains a cornerstone of Nigeria’s industrial sector and a critical player in Africa’s cement market. With robust financials, strategic initiatives, and strong market presence, it holds immense potential for long-term growth while presenting exciting opportunities for investors.
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