By: Jeariogbe Segun
Basis for Rating: Due to low confidence state of the market, we expect harsh reactions to the dividend position of Forte Oil. Hence we placed a Sell on Forte Oil share for a repositioning at new low.
- Earnings per share dropped by 50.11% from N4.45 to N2.22
- Earnings yield is 3.12% against 1.49% in the previous year. This is despite the huge price differences between compared periods
- Financial Leverage is currently 3.25x implying that Total Assets can yield more than three times the equity
- Compared to industrial pairs, Forte Oil interest coverage is low, although with 15.83x it still remained very strong and has enough muscle to service its debt.
The margin between FO operating expenses and reported turnover is fair enough at 8.96%. The fact that it reduced within compared year is also commendable.