Business 3 May 2026 Daily Monitor (Uganda)
Bank of Baroda: Top-Performing Stock with Strong Yields and Undervalued Potential
Bank of Baroda has delivered exceptional returns for investors through disciplined operations, surging dividends, and robust profitability, turning a Shs1m investment in 2022 into over Shs27m today. Despite impressive gains, analysts see it remaining undervalued compared to market peers. Source: https://www.monitor.co.ug/uganda/business/markets/bank-of-baroda-high-yielding-stock-but-largely-undervalued-5445816
Investing Shs1 million in Bank of Baroda shares back in 2022 at around Shs13 per share would have secured about 76,923 shares. A 2023 bonus issue of five shares for every one held boosted holdings to 461,538 shares at no extra cost.
Dividends followed: Shs2 per share in 2023 and Shs4 in 2024, totaling roughly Shs2.77 million in payouts. A proposed Shs6 per share for 2025, if approved, adds another Shs2.77 million. With shares now at Shs54, the position exceeds Shs24.9 million in value—transforming the initial stake into over Shs27 million in four years.
This performance stems from heightened profitability and dividends rising 50% from Shs4 to Shs6 per share, per equities analyst Expedito Gitta. The 2024 yield hit 13.3% on cost, now around 40% with doubled dividends. Share price climbed 260% from Shs15 to Shs54, mirroring earnings growth.
Key drivers include tight lending discipline with a 0.02% non-performing asset ratio on a Shs1.61 trillion loan book, profit after tax up 17.1% to Shs156.8 billion in 2025, and a 15% compound annual growth rate since 2021. Shareholders’ equity grew from Shs554 billion to Shs911 billion, yielding an 18.2% return on equity.
Uganda Securities Exchange CEO Paul Bwiso highlights appeal in consistent management and returns. Dividends tripled from Shs30 billion to a proposed Shs90 billion, with payout ratio nearing 60%.
Despite rising deposit costs—up 4.6% while income grew 9.6%—capital adequacy remains robust at 31.96%, over three times the minimum. Trading income surged 25% to Shs132.1 billion.
Yet, at Shs54, shares trade below book value of Shs60.7 and a price-to-earnings ratio of 5 versus the USE average of 9.5, suggesting potential to reach Shs99 if aligned with peers. The stock led USE with 111% gains in 2025.
Source: Daily Monitor (Uganda)