Meyer Plc and Berger Paints Plc, both listed on the NGX under the Industrial sector and Building Materials sub-sector, have seen their shares rally strongly this year
They operate alongside major industrial peers like BUA Cement, Dangote Cement, and Lafarge (WAPCO) in the sector/subsector
But for the paint manufacturers, as of August 2025, Meyer Plc led the pack with a 98.7% year-to-date (YtD) gain, while Berger Paints posted also a strong 84.5% YtD increase.
Both have substantially outperformed the Industrial Index (39.27% YtD) and the All-Share Index (36.31% YtD).
Looking at their recent history also, Meyer Plc led in 2024 with a remarkable 158% YtD gain, whereas Berger Paints recorded a solid 54% increase.
However, while the impressive share price rallies suggest a bullish market sentiment, a rising price alone does not tell the full story.
Investors should weigh the factors driving the rally, the sustainability of the growth, and how the market is valuing these companies.
From this perspective, we will assess how both companies have performed financially, determine if the rallies are supported by strong fundamentals, and identify which one currently offers better value.
When you put the two paint makers side by side, Berger comes across as the bigger player. Its balance sheet stands at about N7.6 billion, more than twice the size of Meyer’s N2.99 billion.
But size isn’t everything. Both companies have kept debt low, which means they don’t spend much on interest payments.
That’s a plus for investors because it lowers financial risk and leaves room to borrow later if they want to expand.
Looking at how they’re financed, Meyer is the more cautious one: about 65% of its assets are funded by shareholders’ equity.
Berger, on the other hand, leans a bit more on debt, with equity covering around 55% of its assets.
This suggests that Meyer is safer but slower, relying mostly on its own money. Berger takes on a little more risk, but that could mean bigger rewards if business conditions turn favourable.
Berger Paints and Meyer are both doing well but in different ways.
In plain terms, Berger sells more paint and makes more money overall, but Meyer is more efficient at keeping profits from every Naira earned.
In plain terms, Berger sells more paint and makes more money overall, but Meyer is more efficient at keeping profits from every Naira earned.
Looking at asset use, Berger is stronger, it generates almost N2 in revenue for every N1 of assets (1.92x), compared to Meyer’s 1.1x. This shows Berger gets more out of what it owns.
Now let us look at what the market is saying about the companies.
Berger Paints looks like a heavyweight. Its market capitalization stands at about N11 billion, comfortably above its total assets of N7.6 billion and net assets of N4.2 billion. This shows that investors already value Berger at a premium to its book value.
Meyer, on the other hand, trades at an even steeper premium. With a market cap of N8.9 billion against total assets of N2.99 billion and net assets of N1.94 billion, investors are clearly paying up for Meyer relative to its size.
Now, let’s dig into revenue. Berger is trading at a price-to-sales ratio of 0.92. This means investors are paying just 92 kobo for every N1 in revenue Berger generates. That’s a bargain compared to Meyer’s price-to-sales ratio of 2.28 where investors are paying N2.28 for every N1 of revenue.
Simply put, Berger looks cheaper, while Meyer appears expensive.
Earnings tell the same story.
If profits remain constant, it will take investors about 10 years to recoup their investment in Berger Paints and 20 years in Meyer.
But investors don’t just pay for today’s earnings. They’re betting that profits will grow in the future, which would shorten the payback period.
The big question, however, is whether they can achieve the expected growth.
Over the past five years, Berger Paints has compounded its profit at 33% annually, while Meyer’s profit declined by 23%.
However, the tide has turned in 2025. In the first half of the year, Meyer grew profit by 104% year-on-year, while Berger’s profit surged by over 600%.
Overall, the numbers tell different stories. Berger offers scale and relative undervaluation, while Meyer stands out for efficiency and growth.
Which one an investor prefers depends on whether they’re chasing value (Berger) or margin strength and potential growth (Meyer).
Importantly, both companies maintain low debt profiles especially Meyer, with an almost zero debt-to-equity ratio.
This can give them headroom to add leverage, which could enhance their current low returns on equity as they expand
Investors would likely hope Meyer can return to its 2020 peak, when profit hit the N1 billion mark.
To get our exclusive buy, sell or hold views on stocks and regulated investments, subscribe to www.FTM.Ng.