Wema Bank yesterday made history as it joined the SWOOT club. SWOOT is an acronym for Stocks WIth a Market Cap of Over One Trillion.

There are currently 22 firms in that range, and 8 of them are in the financial services space.

What’s behind the rally ?

Investors may be positioning in the stock because of the stellar interim FY 2025 earnings and an expectation that the firm could pay a bumper dividend.

Wema has a history of increasing its dividend year on year. 

Interim FY 2025 earnings per share was N7.03. At bare minimum, the bank should be able to pay a N1.50 to N2 dividend.

A pull back may be near  

Year to date, the stock is up by 24% outperforming the All Share Index.

The stock is also trading at an all time high (having hit an intra day range of N24.90). Having hit a milestone, shorter term investors could decide to take profit.

At its current price, the stock is trading at 1.63 times book value. Going by this indicator one could argue the stock is overvalued.