The pharmaceutical sector on the NGX is equally performing well in 2025, with the seven listed companies returning an average of 67% year-to-date (YtD) as of September 15, easily outpacing the All-Share Index’s 37.63% gain.
Among them, Fidson Healthcare and May & Baker stand out as two stocks that have powered the rally.
But while both names have rewarded shareholders handsomely, a closer look beneath the surface reveals differences in scale, profitability, financial health, and value.
So far in 2025, Fidson has delivered a 177% YtD gain, the best in the sector. May & Baker, with a still impressive 86.2% YtD return, is lagging relatively.
The gap is even wider when it comes to size; Fidson’s N98.7 billion market cap is three times more than May & Baker’s N30.2 billion.
Revenue and Profit
Over the past five years, Fidson has accumulated N18.5 billion in profit, growing at a CAGR of 9.21%, compared to May & Baker’s N6.2 billion at a similar growth rate.
In the first half of 2025, Fidson’s profit leapt 298% to N6.07bn, with margins improving to 9.62%, while May & Baker grew a more modest 53% to N2.2bn, with a slightly higher margin of 11.34%.
This suggests that May & Baker edged ahead on efficiency, squeezing more profit from each naira of sales, but Fidson’s sheer growth momentum overshadowed that advantage.
Takeaway:
- Fidson offers the high-growth story, rapidly expanding both revenue and the bottom line.
- May & Baker, however, has better efficiency, as reflected in its higher margin.
The balance sheet tells another story.
Fidson has borrowed more, with its debt climbing by over 60% to N25.8bn as of the first half of 2025. That borrowing has helped fuel its rapid growth, but it also means a bigger repayment burden.
For now, it can still handle its interest costs comfortably, but the rising debt is something investors should keep an eye on.
May & Baker, though smaller, has also taken on more debt; up 65% to N7.9 billion. The difference is that it has more room to cover its interest payments as reflected in its higher interest coverage ratio.
Overall, Fidson is leaning on debt to grow fast, while May & Baker is playing it safer, keeping its finances more balanced.
Another perspective comes from their market valuations. Fidson’s market capitalization of N98.7 billion is far above its N29.8 billion net assets and N86.1 billion total assets, showing the market places a higher premium on its growth potential.
May & Baker, at N30.2 billion market cap, also trades above its N11.4 billion net assets and N27.4 billion total assets, but the gap is narrower, suggesting a more modest growth premium.
What this means for investors:
- Fidson’s balance sheet is relatively stretched by debt, but the market is rewarding it with a much higher valuation because of its rapid expansion.
- May & Baker is more conservative, with steadier finances and a smaller premium, which may appeal to investors who value stability over aggressive growth.
Cash flow: advantage – Fidson (recent recovery)
Fidson has had a negative free cash flow of N6.8 billion over the past five years.
- This means that Fidson was spending more than it generated, funding its expansion with debt and external support, which reflects an aggressive growth strategy, but also higher risk.
- Encouragingly, 2025 has shown a turnaround. Its operating cash flow swung to a positive N4.7 billion in the first half, compared to a negative N2.1 billion a year earlier.
- That suggests its rapid revenue and profit growth is finally starting to generate real cash, a crucial sign of financial health.
May & Baker, on the other hand, has been steadier.
- Its five-year free cash flow deficit is just N261 million, a fraction of Fidson’s, supported by cumulative operating cash flow of N4.6 billion.
- However, momentum has slowed: its H1 2025 operating cash flow slipped into the red at -N880 million, down sharply from N2.04 billion the previous year.
- The dip means the company is currently spending more cash than it is bringing in, raising questions about consistency.
What this means for investors:
- Fidson’s past cash deficits reflect a high-growth, high-risk play, but its 2025 turnaround signals that the big bets are starting to pay off.
- For May & Baker’s, the recent slip in cash flow could be an early warning sign.
Growth-focused investors may find Fidson’s shift into positive cash generation compelling, while risk-averse investors will want to watch if May & Baker’s weakness proves temporary or structural.
Valuation: Advantage – Fidson (better value on earnings)
Both Fidson and May & Baker are trading at higher P/E ratios than the industry average (2.8x), which means investors are already paying a premium because they expect these companies to keep growing.
Fidson is at 9.58x, while May & Baker is even higher at 13x, showing stronger growth expectations built into its price.
But when you look at price-to-sales and price-to-book ratios, both stocks are still cheaper than the industry norm.
Fidson trades at 0.92x sales and 3.39x book value, while May & Baker is at 0.84x sales and 2.71x book value.
This suggests that despite their share price rallies, they still offer value compared to peers.
Takeaway:
- Fidson looks more attractive for growth investors, as its lower P/E compared to May & Baker suggests room for further upside.
- May & Baker, with its higher P/E, already reflects strong expectations, so the bar is higher for it to deliver.
Overall, Fidson edges out May & Baker on valuation, combining growth prospects with relatively cheaper entry points.
Both firms also reward shareholders consistently.
- Fidson has paid dividends since 2010, with its N1.00 dividend in 2024 being the highest in a decade, currently yielding 2.33%.
- May & Baker has been equally reliable, paying dividends for at least the past 10 years, with a N0.40 payout in 2024 translating to a 2.99% yield.
Taken together, Fidson clearly leads in market momentum, scale, and growth acceleration, though at the cost of higher leverage and past cash flow strains.
May & Baker, on the other hand, offers better capital efficiency, stronger debt coverage, and slightly higher dividend yield, but its smaller size and slower earnings growth leave it trailing in overall investor appeal.
