As Nigeria’s equities market continues its bullish rally, one sector stands out for all the wrong reasons—oil and gas stocks. While consumer goods, banking, and industrial stocks dominate investors’ attention, the oil and gas sector has been left behind, trading at some of its lowest valuations in recent years. But analysts believe that 2025 may be the year of hidden opportunities in oil and gas equities, making them the “black gold” for savvy investors seeking value in an overheated market.

The Nigerian Exchange (NGX) has been on a blistering run in 2025. By July 24, the All-Share Index (ASI) surged 29.41% year-to-date, crossing the historic 133,000 points to close at 133,200.00. Market capitalisation has ballooned from ₦62.78 trillion in January to ₦84.26 trillion, adding ₦21.5 trillion in value in less than seven months.
Sectoral performance has been equally impressive:
Consumer goods: +62.8% YTD
Banking stocks: +41.64% YTD
Industrial goods: +22.8% YTD
Insurance: +21.33% YTD
In contrast, the NGX Oil and Gas Index has slumped 10.5% as of July 18, making it the worst-performing sector this year.
The oil and gas slump in 2025 is not necessarily a sign of sector weakness. 2024 was a blockbuster year for oil and gas stocks, with the NGX Oil and Gas Index soaring 160%.
Key players delivered exceptional returns:
Oando Plc: +529%
Conoil: +362%
Seplat Energy: +150%
TotalEnergies: +82%
After such a heated rally, profit-taking was inevitable. In Q1 2025, the sector fell 9.3%, extending losses to 10.1% by mid-year. Many investors cashed out, especially as some companies, such as Oando, withheld dividends despite massive capital gains.
“It is not surprising to see investors take profit on oil and gas stocks after their rally in 2024,” noted Adebayo Adebanjo, research associate at CardinalStone.

While capital continues to chase consumer goods and banking stocks, oil and gas equities may now represent the most undervalued plays on the NGX.
As of Q1 2025:
Oil and gas stocks had an average P/E ratio of 9.46x.
Cement industry stocks traded at an average 18.54x, with BUA Cement at a lofty 28.08x.
Presco jumped from 6.25x to 13.13x P/E after strong gains.
Beta Glass surged 439% YTD, pushing its P/E from 2.86x to 9.47x.
This valuation gap suggests that oil and gas stocks remain deeply discounted relative to their earnings, presenting opportunities for investors who can stomach short-term volatility.
Top Oil & Gas Stocks to Watch in 2025
Aradel Plc – A Dividend Machine at a Discount
Aradel remains a textbook case of undervaluation:
P/E Ratio: 8.01x
Net Income (2024): ₦259 billion
Cash Reserves: ₦411 billion
Dividends Paid (2024): ₦130 billion
At its current share price of ₦507, analysts project a dividend yield of around 6% if payouts remain steady. Meristem targets a share price of ₦856.83, while CardinalStone pegs its fair value at ₦840.35, suggesting significant upside.
Trading at ₦5,450 with a P/E ratio of 12.7x, Seplat offers a 4.6% dividend yield, higher than Shell Plc’s 4% global yield. Its consistent earnings and payout history make it attractive for long-term investors.
After 2024’s explosive gains, Oando has dropped 26.7% YTD due to profit-taking and the absence of dividends. However, analysts argue that any return to dividend payouts or stronger earnings guidance could trigger a fresh rally.

Market analysts believe oil and gas stocks could rebound as:
Global oil prices stabilise and Nigeria boosts local crude production.
Dividend payouts return, attracting income-focused investors.
Valuations revert to the mean, especially for fundamentally strong companies.
For now, oil and gas stocks remain a contrarian bet—ignored by the crowd but rich with potential for long-term value hunters.