Dividend payment is one of the very few ways available for investors to earn a constant stream of income. It is also the main reason shareholders hold unto their shares in a company. Therefore, it brings great satisfaction to investors when these companies declare dividends to their shareholders.
According to data gathered by Nairalytics, the research arm of Nairametrics, MTN Nigeria, Dangote Cement, Nestle Nigeria, Stanbic IBTC, GTBank, and Zenith bank were the highest paying dividend stocks on the floor of the Nigerian Stock Exchange in 2019.
With a combined value of N691.23 billion, these six companies make up a diverse list that includes the telecommunication, food and beverage, industrial manufacturing, and banking sectors.
Here’s a breakdown
MTN Nigeria Communications Plc posted a total dividend per share of N7.92k (interim – N2.95k, Final – N4.97k), summing up to N161.21 billion. A dividend payment was made on May 19, 2020, to shareholders whose names appeared on the Register of Members as at April 17, 2020.
The telco giant’s revenue of N1.17 trillion in 2019 against N1.04 trillion in 2018 represents a 12.6% increase. Profit after tax (PAT) also increased significantly by 38.7% from N145.7 billion in 2018 to N202.1 billion in 2019.
Dangote Cement Plc declared a total dividend payout of N272.65 billion. This breaks down to every shareholder of the company earning N16 on every share held. A payment expected to be made after the company’s annual general meeting is scheduled for June 16, 2020, with a qualification date of May 25, 2020.
It is worth noting that the cement manufacturing giant posted a profit after tax of N200.52 billion, a 48.6% decline when compared to a profit of N390.33 billion recorded in 2018.
Nestle Nigeria Plc declared a total dividend of N70 per share to its shareholders, indicating a total payment of N55.49 billion. The leading consumer goods maker generated N284.04 billion in revenue for the year ended December 2019.
The multinational’s profit after tax stood at N45.68 billion, a 6.22% increase compared to N43.01 billion posted in 2018.
The management of Stanbic IBTC Holdings Plc proposed a total dividend per share of N3 (interim – N1 and final – N2) per ordinary share of 50 kobos each, which summed up to N31.57 billion. The interim dividends (N10.47 billion) was paid on October 3, 2019, while the final dividend of N21.01 billion is expected to be paid by June 18, 2020.
The bank’s full-year result shows that the group’s gross earnings increased by 5.2% from N222.36 billion in 2018 to N233.81 billion in 2019.
Stanbic IBTC’s profit after tax for the period recorded a marginal increase of 0.8% to N75.04 billion compared to N74.44 billion in 2018.
Guaranty Trust Bank Plc declared a total of N82.41 billion to shareholders on March 30, 2020 as dividends for the year ended 2019. This indicates a total dividend payment of N2.8 per 50 kobo ordinary shares to shareholders. Final dividend was paid on March 30, 2020 to shareholders whose names were registered in the company’s register of members as at March 18, 2020 which was the qualification date.
GTBank, which is Nigeria’s most capitalized bank, posted a profit after tax of N196.85 billion, showing a 6.5% increase compared to N184.71 billion recorded in the preceding year.
Zenith Bank Plc also paid N2.8 dividends per ordinary share to its shareholders, summing up to N87.91 billion (interim – N9.42 billion, Final – N78.49 billion) for the year ended 2019. The bank posted profit after tax (PAT) of N208.84 billion in the year under review.
The final dividends were paid to Shareholder in March 2020 whose names appeared in the Register of Members as at close of business on 9th March 2020.
What is dividend?
A dividend is a payment by a company to its shareholders, which is paid at the end of a quarter or year. Note that dividends are usually cash payments, although they can sometimes be paid out in company stock.
What to look out for in dividend stocks
The following are what you should look out for in dividend stocks:
Payout Ratio: The dividend payout ratio is the percentage of a company’s earnings it uses in paying out dividends. This is an important metric to use when digging into dividend stocks you are considering to buy.
Dividend History: This is simple. All a potential investor needs to do is to check the track record of the company. Many of the companies mentioned above have trackable and impressive track records, including long records of paying annual and interim dividends.
Industry Strength: Here, it is better to own shares in a decent company in a great and lucrative sector than owning shares of a great firm in a tough industry.
Nigeria needs urgent economic diversification – AfDB
The AfDB said that the diversification of the Nigerian economy had become important for it to respond favourably to the emerging challenges of the 21st century.
The African Development Bank has stated that Nigeria, Africa’s largest economy, needs urgent economic diversification to move the country from a single income source (oil and minerals) towards multiple income sources.
This was disclosed by Prof. Oyelaran-Oyeyinka Oyebanji, Senior Special Adviser on Industrialisation at African Development Bank (AfDB), at the 22nd Founder’s Day Lecture of the Igbinedion University, the first private university in Edo state, on Monday.
What the AfDB said about diversification
“In pursuit of long-term recovery and sustainable development, Nigeria needs urgent economic diversification. Nothing is more poignantly demonstrative of the danger of over-reliance on a single or narrow range of commodities than the recent crash in oil price we saw in 2020 due to the COVID-19.
Economic diversification entails a shift away from a single income source (oil and minerals) toward multiple income sources from an increasing spectrum of sectors, products and markets,” he said.
In case you missed it
The International Monetary Fund (IMF) stated earlier this year that economic diversification was important to Nigeria and critical for her economic recovery.
They said the limited gains from inward-oriented policies in terms of creating jobs and improving living standards suggested that Nigeria needed to have a change of strategy. It was pointed out that in order to accommodate a growing number of young people entering the labour market, Nigeria would need to create at least 5 million new jobs each year over the next decade.
Ghana-Nigerian traders dispute: FG to send delegation to Ghana
The delegation will be led by the Minister of Trade, Niyi Adebayo, and comprised of other private stakeholders.
The Nigerian Government will send a delegation led by the Minister of Trade, Niyi Adebayo, to Ghana to end the crisis between Nigerian traders in Ghana and local authorities—an issue that started last year before the Ghanaian Presidential elections.
The delegation was ordered by the Presidency as disclosed in a statement by the trade ministry on Monday evening.
The statement revealed that the delegation would be comprised of private stakeholders also who would be sent to dialogue with Ghanaian trade authorities to find a solution to the crisis.
The meeting between both parties will be held between May 31 and June 1, 2021.
What you should know
Recall Nairametrics reported last year that Ghana’s Foreign Minister, Shirley Ayorkor Botchwey, said that Nigeria’s border closure in 2019 hurt Ghanaians and nearly bankrupted many Ghanaian export businesses after their goods were stuck at the Seme Border for months, reacting to the shutdown of Nigerian-owned shops by Ghanaian authorities last year.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- FMDQ approves quotation of MTN’s Commercial Paper worth N73.5 billion.
- MTN Nigeria issues a 7-Year Series 1 bond worth N110 billion.
- Caverton Offshore Support Group reports profit after tax of N520 million in Q1 2021.
- Okomu Oil proposes dividend worth N6.7 billion for shareholders.
- Ardova Plc confirms appointment of Oladeinde Nelson-Cole as secretary.