Guaranty Trust Bank Plc has over the years been a favourite for investors in the banking industry. Apart from being one of the most professionally and shrewdest run bank in the country the bank is well-known for paying dividends. Investors love this fact and has rewarded the bank with capital appreciation and higher earnings multiple over the years. In fact, it was one of the first of the new generation banks to pay dividends twice in a year.
Available records from the Bank’s dividend history in the last 10 years (2004 – 2014) reveals that it had paid out a whopping N218billion in dividends over the last 10 years. The dividend is made up for both interim and final dividend which it pays after its Half year and full year results respectively. The data also reveals that the bank’s dividend has grown by a whopping 37% in compounded annual growth rate (CAGR) for the period between 2004 and 2014. From a dividend of N2.1billion in 2004, the bank has grown its dividend payment to N50 billion as at last year.
Investors have also rewarded the bank through its valuation increasing market valuation from N60 billion to about N721 billion today. That represents a CAGR of about 25% in that period suggesting that dividend growth may have grown even higher than market valuation. Currently, trailing dividend yield (based on total payouts) is around 7%. This is basically the stuff fundamental investors love. For those seeking for long-term value whilst relying on past performance this is good candidate. It is also important to note that in investing past events are not always a good measure of future performance.