Guaranty Trust Holding Co.

GTCO · NGX · Banking 

MARKET PRICE

₦139.45

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NIGERIA MARKET CONTEXT

Risk-Free Rate (FGN 10yr)

14.85%

Equity Risk Premium

9.49%

Cost of Equity (Ke)

21.0185%

VALUATION SIGNAL

HOLD

Our valuation suggests Guaranty Trust Holding Co. is approximately fairly valued at the current NGX price.

-2.1%

vs. fair value

CONSTANT GROWTH DDM

₦123.16

-11.7% vs NGX price

P₀ = D₁ ÷ (Ke − g)
₦14.80 ÷ (21.0185% − 9%)
= ₦123.16

TWO-STAGE DDM

₦149.93

+7.5% vs NGX price

Stage 1: g = 16% for 5 years
Perpetual: g = 9%
Fair value: ₦149.93

COMPOSITE FAIR VALUE (AVERAGE OF BOTH MODELS)

₦136.54

OPPORTUNITY COST COMPARISON

Fair value

₦136.54

Current price

₦139.45

Signal

HOLD  (-2.1%)

T-bill alternative

22.52% risk-free

GTCO dividend yield

9.15% (₦12.76 / ₦139.45)

Gap to beat T-bill

+13.4% capital gains needed

For GTCO equities to beat T-bills at current prices, the stock must deliver 13.4% in capital appreciation on top of its 9.15% dividend yield — a total return of 22.52%.

Verdict History

Date	Previous	New	Price at flip	Fair value
14 May 2026	SELL	HOLD	₦147.50	₦136.54

Two-Stage DDM — Dividend Schedule

Year	Stage	Growth	Dividend	Discount Factor	Present Value
1	Stage 1	16.0%	₦14.80	0.8263	₦12.23
2	Stage 1	16.0%	₦17.17	0.6828	₦11.72
3	Stage 1	16.0%	₦19.92	0.5642	₦11.24
4	Stage 1	16.0%	₦23.10	0.4662	₦10.77
5	Stage 1	16.0%	₦26.80	0.3852	₦10.32
TV	Perpetuity	9.0%	₦29.21	0.3852	₦93.64 (TV=₦243.06)

WACC Breakdown

Market Cap₦4,378.17B

Total DebtN/A (bank)

Equity Weight (We)100.0%

Debt Weight (Wd)0.0%

Cost of Equity (Ke)21.02%

WACC21.02%

Sensitivity Analysis — g₁ vs g₂

₦120g₁=12.0 g₂=7.5

₦124g₁=12.0 g₂=8.3

₦129g₁=12.0 g₂=9.0

₦135g₁=12.0 g₂=9.8

₦142g₁=12.0 g₂=10.5

₦129g₁=14.0 g₂=7.5

₦134g₁=14.0 g₂=8.3

₦139g₁=14.0 g₂=9.0

₦146g₁=14.0 g₂=9.8

₦153g₁=14.0 g₂=10.5

₦138g₁=16.0 g₂=7.5

₦144g₁=16.0 g₂=8.3

₦150g₁=16.0 g₂=9.0

₦157g₁=16.0 g₂=9.8

₦165g₁=16.0 g₂=10.5

₦149g₁=18.0 g₂=7.5

₦155g₁=18.0 g₂=8.3

₦161g₁=18.0 g₂=9.0

₦169g₁=18.0 g₂=9.8

₦177g₁=18.0 g₂=10.5

₦159g₁=20.0 g₂=7.5

₦166g₁=20.0 g₂=8.3

₦173g₁=20.0 g₂=9.0

₦181g₁=20.0 g₂=9.8

₦191g₁=20.0 g₂=10.5

Nigeria-Specific Risk Factors

01

Naira devaluation risk. All dividends are naira-denominated, but Nigeria's exchange rate has moved from ₦460 to ₦1,614/USD in two years. Real value of dividend income for dollar-benchmarked investors erodes rapidly.

02

High risk-free rate compresses all valuations. With FGN bonds yielding 14.85%, the Ke−g spread is narrow. A 100 bps CBN rate rise cascades through Ke and sharply reduces intrinsic values.

03

Inflation distorts growth assumptions. Nigeria's inflation recently exceeded 34%. A 9% perpetual growth rate may represent negative real dividend growth. Always compare to current CPI.

04

NGX liquidity and data quality. Many NGX stocks have thin volumes, wide bid-ask spreads, and delayed financial reporting. Companies frequently defer dividends based on CBN regulations or recapitalisation requirements.

Owo provides financial modelling for informational purposes only. Not investment advice.