‘Energy, Materials and Industrial’ (EMI) stocks as well as those in real estate have emerged as the top performers on the Jamaican stock market, based on indicators released by NCB Capital Markets, the undoubted capital market leader in Jamaica.
EMI and real estate stocks were the standout champions in the local equities market, arising from their impressive strides in earnings growth, dividend payouts and market valuations while financial sector stocks among others stumbled out of the blocks.
Based on earnings growth EMI, Manufacturing & Distribution (M&D) and conglomerates stocks led the pack with EMI taking gold in a nail-biting finish with earnings nearly doubling over the last five years with a compound annual growth rate (CAGR ) of 19.3 per cent. This strong performance was driven by a late surge in 2023 from TransJamaican Highway (TJH) and steady increases from Caribbean Cement.
Details of earnings assessment
The assessment shows M&D stocks following closely behind with a consistent earnings uptrend doubling their output over the last five years with a CAGR of 18.4 per cent. This was driven by food M&D companies, which benefited from increased local and external demand, improved operational efficiency, economic growth, higher wages locally and high levels of employment.
Leading contributors included Wisynco, Seprod and Lasco Manufacturing (LASM). Seprod’s earnings grew by a CAGR of 28.1 per cent, Wisynco’s by 20.9 per cent and LASM’s by 17.2 per cent. Smaller players like Honey Bun also saw significant growth with earnings increasing fifteen-fold and a CAGR of 72.9 per cent.
Aided by a massive earnings jump from Jamaica Producers Group (JPG) in 2023, conglomerates secured the bronze stop, edging out real estate stocks. JPG’s massive earnings were triggered by the sale of its operating businesses to Pan Jamaica Group (PJG) in 2023 in exchange for a 34.5 per cent interest in PJG, resulting in a substantial one-off gain of $13.29 billion.
Fuelled by these one-off gains, JPG’s earnings grew at a CAGR of 76.5 per cent to J$15.30 billion over five years. With Jamaica Broilers Group’s contribution, total conglomerate earnings grew over five years at a CAGR of 18.3 per cent, reaching a personal best of J$25.82 billion, representing a 106.9 per cent year-over-year increase.
Real estate stock performances
Real estate stocks come in third with a CAGR of 12.3 per cent. Based on annual dividend payouts, NCB Cap Market has assessed that real estate, EMI and tourism stocks took the podium finishes, as real estate equities took the gold with a six-fold increase in total annual dividends paid over the last five years and a CAGR of 45.1 per cent.
Key contributors included Kingston Properties Limited (KPREIT) and Eppley Caribbean Property Fund (CPFV). KPREIT saw a nearly nine-fold increase in dividends (with a CAGR of 54.8 per cent). EMI stocks secured the silver with dividends quadrupling over the period at a CAGR of 31.5 per cent.
Among them, TJH led the charge with dividend payments increasing four-fold with a CAGR of 35.5 per cent, in line with the robust growth in its earnings. Kingston Wharves was another consistent player with dividends growing by 170 per cent and a CAGR of 35.1 per cent.
Caribbean Cement also made a notable comeback with two consecutive years of dividend payouts after a 17-year hiatus. Tourism sector stocks earned the bronze, rebounding from pandemic lows to surpass pre-pandemic dividend highs and a CAGR of 11.83 per cent. Contributing to this was Dolphin Cove, doubling its dividends year-over-year in 2023, showcasing a strong recovery in the tourism sector post-pandemic.
Capital gains assessment
The assessment also examined market capital changes to see which sectors provided investors with the greatest capital gains over the last five years with the ‘Health/Tech’ sector sprinting to gold over the last five years. The Health/Tech sector is an NCB Cap Market-curated composite of local small-cap health, education technology and digital marketing stocks.
Six of the 12 companies included in this market segment went public between December 2018 and December 2023. Among these companies, Indies Pharma saw the most significant price appreciation increasing from an Initial Public Offer price of $1.50 to $2.47 (+64.7 per cent).
Its capital appreciation reflects earnings growth (CAGR 8.0 per cent) amid rising demand for essential pharmaceuticals like new orthopaedic and joint rehabilitation products. The real estate sector took the silver medal with a market cap growing at a five-year CAGR of 36.5 per cent and this performance was driven primarily by strong market capital appreciation from major player KPREIT (CAGR 22.7 per cent) supported by an additional public offer (APO) and share price appreciation from $6.00 to $7.80.
Additionally, IPOs for CPFV in June 2019 and First Rock in January 2020 added a total of $8.37 billion to the sector’s market capitalisation. M&D stocks took the bronze (CAGR 20.77 per cent) driven by significant gains from main market M&D companies like Seprod (CAGR 31.3 per cent), Wisynco (CAGR 19.0 per cent) and JBG with a CAGR 10.4 per cent over the five year period.
Source: Our Today
