Unilever Nigeria Plc released its 2015 full year results revealing profit after taxes dropped by 51% to N1.9 billion. Profits have now dropped by about 80% since 2012 when it last crossed N5.5 billion.
Unilever share price has dropped from a high of N65.9 in mid 2013 to about N30 today. The 50% drop is indicative of the fall in its profits over the years as well as the exit of portfolio investors in the last couple of years. Nevertheless, this stock still trades at a lofty price earnings ratio of 94x (earnings per share of 32 kobo and share price of N30). If you are wondering why, it all boils down to the float. Unilever is tightly held and as such, has little liquidity that may have helped push the share price further down. Unilever share price is currently down 29% year to date compared to the All Share Index which is down by about 9% or the consumer index which is down by about 19% YTD.
Unilever declared dividend per share of about 5 kobo translating to a dividend yield of about 0.32% and one of the lowest in the industry. In simple terms, for every N100 invested in this company you only get 32 kobo. Total dividend payout this year is expected to be about N189 million compared to about N4 billion from its 2013 results. In fact, total executive compensation of about N276 million in executive compensation for the year. It’s a raw deal for dividend loving shareholders who will have to be content with the fact the share price is still highly over valued.