Top Nigerian Stocks to Buy in 2022

Buying stocks has always been a means to build actual net worth. Knowing what stocks to buy in 2022 is one way to get ahead and also prepare you to reap the rewards of your investments in 2022.

Many investors who aren’t investment professionals have lost money this year for so many reasons. One reason is that they do not take time to sift and research through the various stocks available for them.

Top Nigerian Stocks to Buy in 2022

The goal of investing in the best stocks is to set your money aside to work for you, yielding more money in the coming year.

If you wonder what stocks to buy in 2022, this might be the article for you. This article will share the best stocks to purchase or invest in in 2022. We will also walk you through how to get started investing in stocks and how you can minimize cost and maximize returns on all your investments in 2022

What is Stock?

The term “Stock” (also referred to as equity) is a negotiable financial instrument with monetary value that depicts the ownership of a portion of a company. This makes the stock owner entitled to a fraction of the company’s assets, and the profit the stock owner receives is equivalent to how much stock they possess. Units of stocks are known as “shares.”

You can buy and sell stocks mainly on stock exchanges or in the stock market. However, there are some private sales, and these private sales form the foundation for the portfolio of many investors.

How does the stock market work?

The way the stock market works is pretty simple. First, you need to understand that a stock market is where investors meet to buy and sell stocks, bonds, securities, and exchange-traded funds (ETFs). On the stock market, different companies list their shares on an exchange. Individual investors can purchase stocks through a retirement account like IRA or a brokerage account. Most corporations or companies sell (issue) stocks to raise funds to run their businesses effectively. The person who buys the stock (also known as a shareholder) now owns a piece of the company, and sometimes, depending on the type of stocks they buy, the shareholder has the right to claim a part of the company’s assets or earnings. In other words, the stockholder now becomes an owner of the issuing corporation.

More so, the stock prices on the stock market are influenced by demand and supply. If the demand for stocks is high, investors will most likely purchase stocks quickly, which will cause the price to increase. Conversely, if investors are more eager to sell than they want to buy, stock prices will reduce.

In most corporations, ownership is predominantly determined by the number of shares the shareholder owns in relation to the number of company’s stock held by its shareholders.

Top stocks to buy in 2022

Below is a list of the best performing Nigerian stocks you can invest n 2022:

  1. Access Bank Stocks: The customer deposits in Access bank grew from N486 Billion in 2010 to about N1.1 trillion naira in 2011. It didn’t end there. In 2018, it grew from N2.5 trillion to N4.2 trillion in the following year. After Access Bank merged with Diamond bank in 2019, the net interest income and customer deposit of Access bank skyrocketed.If you are thinking of buying stocks in 2022, you can consider buying stocks with Access bank. Despite having a value of N322 billion at N9 per share on the stock market, choosing an access bank would be a firm to buy stocks from would be the best decision even beyond 2022. Because in terms of net interest income and customer deposit, Access Bank surpasses banks like GTB, Stanbic IBTC, and Zenith bank an
  2. FBN Holdings: FBN Holdings is a company that provides investment, corporate, commercial banking, and other financial services in Nigeria and abroad. FBN Holdings also operates via a retail banking services group. Its another option for individuals that want to invest in stocks in 2022. The company provides its shareholders with tangible resources that guarantee clear-cut investment opportunities. They
  3. MTN Nigeria. MTN is one of the biggest companies for anyone seeking to buy stocks in 2022. They are a telecommunication company that offers broadband wireless access and mobile financial services in Nigeria and Africa. As we all know, they also provide mobile telecommunication services such as airtime, data subscription, short message service, and many other services. MTN has a market capitalization of about N3.4T. you can become a shareholder in MTN shares by reaching out to a financial analyst who covers MTN’s stock
  4. BUA Cement: this is a Nigeria-based cement-producing company. BUA cement is majorly focused on manufacturing cement through subsidiaries. At the end of November 2021 trading activities, BUA Cement stocks appreciated by 3.5%. You should invest in BUA cement because the company has a market capitalization of N2.5 trillion. The company’s earnings have been predicted to increase by 17.74% per year. And it is going to skyrocket in 2022.
  5. Custodian Allied: custodian allied is a subsidiary of Custodian Investment Plc. The company is a top investment group in Nigeria. They are more domiciled in the financial services sector. The company provides a wide variety of insurance products and services in Nigeria. They operate through property development and management, both Life and Non-life business, pension administration, and trustees. They have a market capitalization of N45.29B.
  6. Dangote Cement: Dangote cement is another leading multinational entity in Nigeria. They operate through preparing, manufacturing, and distribution of cement in Nigeria. Dangote cement is an excellent choice for anyone seeking to buy stocks in 2022. They have dividend yields of 6.41% and a market capitalization of N4.27 trillion, approximately $14 billion. As of November 2021, the current share price of this company is N280.00 per share in the stock exchange market. Both foreign and domestic investors have invested over N598.12 billion in stocks. The company also has a high forecast growth rate that transcends beyond 2022.

How to pick the best stock to buy in 2022

If the thought of buying stocks in 2022 scares you, you are not alone. The truth is that investing or buying stocks in the stock market comes with risk, but one of the best ways to succeed in the stock market is when you approach it strategically and in a disciplined manner.

With tens of thousands of stocks or shares for you to choose from, the challenge is picking those stocks that are worth buying. Often, investors are being advised to leave the stock-picking for investment professionals. To a large extent, that is good advice because professionals have resources and work with a handful of analysts. However, an individual investor can pick the best stock if they have access to a top stock screener.

Here are four critical steps to picking stocks in 2022

these steps will help you screen the universe of all types of stocks and finally narrow them to those that meet your investment criteria.

Find an industry

It is an everyday practice for investors to begin their stock-picking process by searching for a drive with promising drivers for growth. Other investors search for formidable themes but still have room for future growth and expansion. One of such industries is the health industry.

Analyze those investments with statistics

Narrowing it down is necessary once you have found an industry suitable for you. Different companies have different sizes. Some companies are grouped as micro, small, mid, large capitalization, depending on their shares or stock value. Some individual investors are okay with lap-cap companies that have become popular. Companies like ExxonMobil, Apple, Amazo.com

Find out the market capitalization of the company. You can get this by multiplying the current stock price by the number of shares outstanding

Carry out a stock screen

A stock screener majorly does the job of stock picking for individual investors. They sieve through a list of stocks, both local and international market; then they identify the ones that are most suitable for your investment strategy. Ultimately, the more you use a stock screener, the more proficient you will become at streamlining your choices to just the best investments only.

Various stock screeners depend on the type of investment you want to make. Some stock screeners are for buy and hold investors, swing traders, free options, while others are for global investing. To effectively construct a stock screening, you must first determine your risk tolerance, tax implications, and financial goal.

Narrow down your result and perform a deep analysis

The truth is, even after constructing a stock screen, some firms may still look attractive to you. The only way out is to perform further scrutiny about these firms. You can use parameters such as your social or personal concerns, or your comfort level with such industry

When to buy stock in 2022 and when to sell

When it comes to trading in the stock market, timing is critical. For an individual investor, finding a stock to invest in can be exciting and rewarding at the same time. It can also be profitable as long as you buy a store with high growth potential.

Before you go on to buy any stocks in 2022, here are five tips that will give you an insight into when to buy stocks so that you are at the benefiting end.

Target when the stock goes on sale

There are specific dates that people always look out for. They include black Friday and Christmas season. There is usually a voracious demand for various products during these seasons, and goods’ prices are generally low. Most investors try to stay away from stocks when their prices go low. One of the best times for investors to buy stocks at beaten-down prices is when there is a crash or a correction in the stock market.

Note that when the stock is undervalued

Undervalued is another thing you need to consider when buying stocks in the coming year. undervalued is a situation whereby security or a store is selling at a price presumed to be lower than its actual value. You can know if the stock you want to buy is currently undervalued by looking at the underlying firm’s financial statement. An undervalued stock can also be evaluated by analyzing the firm’s cash flow, profit generation, return on assets, and capital management. And you can determine if a stock is overvalued by estimating the company’s future growth.

Know when to hold a stock

Here is one mistake most investors make regarding reaping from stocks and shares.  Supposing you have carried out all your underground work, carefully selected the right stock, and identified the stock’s target price, you don’t expect to see the stock you purchase rise in value just immediately. You need patience if you genuinely want to benefit from your investments.  It takes time for a stock to equal its actual weight. Although sometimes, some analysts might predict the prices and value over the next few months or quarters. But the truth is, depending on the stock you purchased, it can take a couple of years for it to appreciate. If you are confident that the stock will rise quickly, it is best you buy and hold for a minimum of three to five years.

I would advise you to avoid buying or selling stock in 2022 if you have not yet gotten a deep knowledge of how the corporation makes their money, what they produce, the kind of service they offer, and the countries they operate. Before purchasing stocks from a company, it is necessary to read more about them on Google.

Final thoughts

Now that you have decided to start buying stocks in 2022. It is good you note that a low price-to-earnings ratio is chiefly preferable to a high price-to-earning. It is also essential to know that a firm with enough cash on its balance sheet is better than a firm with lots of debt.

References

https://www.investopedia.com/terms/s/stock.asp – Stocks

https://www.investopedia.com/articles/investing/082614/how-stock-market-works.asp – How the stock market works

https://www.investopedia.com/articles/basics/06/invest1000.asp – how to start investing in stocks

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