GTCO or Zenith Bank? How to Pick Winning NGX Stocks

FUND MANAGER SERIES: THE PARAMOUNT FUND (EQUITY) · NOTE 4/5 

Same Sector. Two Stocks. 
Which One Do You Buy? 

The best investment is not always the best company. Sometimes it is simply the better value at that moment. Here is the method that finds it. 

Favour Tewogbade  ·  Chapel Hill Denham Management 

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You need a new phone. You have done your research, set your budget, and narrowed it down to two options at the same Slot or Pointek store, a Samsung A-series and a Tecno Camon, similar cameras, similar storage, similar price. The Samsung is ₦185,000. The Tecno is ₦140,000. 

You do not just look at the price. You think about battery life, which one your friends already use, software updates, resale value in a year's time, which brand the phone repair guy on your street knows inside out. You are not asking 'is this a good phone?' You are asking 'which of these two is the better deal for me right now?' 

That is pairs analysis. And it is exactly how professional investors approach the Nigerian stock market. 

 

WORD TO KNOW - Pairs Analysis: Comparing two companies in the same sector to find which offers better value at a specific moment. The goal is not to find the best company in absolute terms it is to find the better investment at the current price

 

Every Sector Has a Pair. Every Pair Has a Better Side. 

In almost every sector of the Nigerian economy, there are two or more listed companies fighting for the same customers, operating under the same regulations, facing the same macroeconomic pressures. The question is never just 'is this a good company?' It is: 'is this a better buy than the other one sitting right next to it?' 

Here is what that looks like across a few of Nigeria's key sectors: 

Banking 

GTCO vs Zenith Bank vs Access —  same regulatory environment. Which has the stronger operations and the more attractive valuation right now? 

Cement 

Dangote Cement vs BUA Cement —  same Nigerian construction market. Different regional footprints, different cost structures. Where is the better value per Naira invested? 

Telecoms 

MTN Nigeria vs Airtel Africa —  same service provision. Which is growing faster, and is that growth already in the price? 

Energy 

Seplat Energy vs Aradel Holdings —  both operating locally, one dual-listed in London. Which is more efficiently priced? 

 

When the Gap Opens Up 

When two companies in the same sector trade at very different valuations, one of three things is happening. The more expensive one genuinely deserves its premium. Or the cheaper one is genuinely undervalued. Or the market has simply mispriced one of them, and time will correct it. 

Finding that gap is where returns come from. Not from predicting the future. Not from tips or rumours. From the patient work of comparing two businesses that are running the same race and asking: which is running it better, and which has the market noticed yet? 

Markets in the short run reward hype (attention and noise). In the long run, true value prevails. A company does not deserve to trade at twice the valuation of its nearest competitor simply because it is more talked about. Eventually, the gap closes, either because the expensive one adjusts downward, or because the undervalued one gets recognised. Either way, the investor who spotted the mispricing benefits. 

The Paramount Principle - We only invest where valuation is supported by real buying and selling activity. If nobody is actively trading a stock, the price on screen tells you very little about what it is actually worth. 

FROM THE FUND MANAGER 

"We never buy a company in isolation. We always ask: compared to what? The comparison is where the real insight lives." 

 

What to Take From This Note 

→  Pairs analysis compares two companies in the same sector to find which is better value right now — not which is the better business in absolute terms. 

→  In almost every Nigerian sector, there are two or more listed companies competing for the same market. The question is which one deserves your money at today's price. 

→  When two comparable companies have very different valuations, the market has usually mispriced one of them. That gap is where investment opportunity lives. 

→  Markets reward enthusiasm in the short term and fundamentals in the long term. Patient investors who spot the gap and wait for it to close tend to be rewarded. 

 

💬  YOUR TURN: QUICK QUIZ 

Two cement companies operate in the same Nigerian market with the same cost base. Company A's shares have doubled this year and now trade at a premium valuation. Company B has barely moved and trades at a discount. What does a pairs analyst do? 

☐  Buy Company A. Momentum means the market believes in it 

☐  Investigate whether Company B is undervalued relative to Company A 

☐  Avoid the sector entirely until prices stabilise 

☐  Buy both equally to avoid making the wrong choice 

Drop your answer in the comments below 👇🏾 

 

Coming in Note 5 — the final note in this series: why Nigerian equities, held through a disciplined framework like this one, are the most powerful long-term wealth-building tool available to Nigerian investors today. 

 

Thinks in pairs. Every time. 

The Paramount Fund assesses relative value across every sector before committing a Naira. It is one of the reasons the fund has consistently outperformed the NGX 30 Index over every measured period. 

 

Figures as at August 26, 2026.  Source: Chapel Hill Denham. Past performance is not a guarantee of future results. 

→  Subscribe to the Paramount Fund (Equity) on the InvestNaija app 

IMPORTANT NOTICE 

This document is issued by Chapel Hill Denham Management Limited, registered with the Securities & Exchange Commission, Nigeria (SEC), and fund manager of the Paramount Fund (Equity). It is for informational purposes only and does not constitute investment advice or an offer to buy or sell units of the Fund. Past performance is not a guarantee of future results. 

 

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