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.
N40 billion Probe: Drama as Reps order arrest of Ag MD NDDC after walking out on them
Pondei walked out of the hearing after accusing Hon. Tunji-Ojo of corruption.
The corruption allegation drama going on between the National Assembly and the Niger Delta Development Commission (NDDC) took a new twist as acting Managing Director of the commission, Prof. Kemebradikumo Pondei and his team on Thursday, walked out on legislators investigating the alleged N40 billion irregular expenditure in the commission.
In a reaction to the development, the House of Representative Committee on NDDC, has issued a warrant of arrest on the acting Managing Director.
Pondei walked out of the investigative hearing on Thursday in Abuja, after accusing the Chairman of the House of Representative committee on NDDC, Olubumi Tunji-Ojo (APC-Ondo) of corruption.
According to the acting Managing Director, “We in the NDDC are not comfortable with the Chairman of this committee, presiding over the matter. He is an interested party and we do not believe that the NDDC can have justice because he cannot seat on his own case.”
“We have no issue of appearing, we appeared before the Senate ad hoc committee and as long as he remains, we will not make any presentation,” he said
However, the issuing of warrant of arrest by the lawmakers, follows the unanimous adoption of the motion by Rep. Benjamin Kalu at the investigative hearing On Thursday in Abuja.
Kalu, who is the spokesman of the house, commended the committee members for the maturity that they have displayed despite the provocations of the NDDC boss.
Kalu in his statement said, ”I want to refer this committee as well as the invited guests to section 60 which says that, the Senate or the House of Representatives shall have powers to regulate its own procedure.
“It is within the parameters of the law that the house regulates its activities, this is a committee affair and not a personalised affair.
“I want to move that this committee invokes the provisions of section 89 of the Constitution and invoke our powers on warrant of arrest to compel the agency to come and answer how they have administered the money appropriated to them,” he said.
The committee, later passed a vote of confidence on the Chairman, while describing him as a man of integrity and a leader of high reputation.
Earlier in his speech, Tunji-Ojo said that documents from the Central Bank of Nigeria and the Office of the Accountant General of the Federation when there officials appeared before the investigative panel showed that NDDC had spent N81.5 billion between January and May 2020.
Why Artificial Intelligence will separate winning banks from losers amid COVID-19
Banks around the world were already under pressure to fully deploy Artificial Intelligence prior to the pandemic.
Banking experts from around the world believe that Artificial Intelligence (AI) will become the differentiating factor between banks that will succeed and those that will fail, in the new era of global banking.
A new report by The Economist Intelligence Unit, which was sponsored by Geneva-based banking software company Temenos AG, surveyed some 305 banking executives from around the world. 77% of these bankers stated that AI will separate winning banks from losers.
The role of COVID-19 pandemic
The report also noted that the COVID-19 pandemic has put global banks under immense pressure to readjust their strategies and align with the technological requirements of the 21st-century banking industry.
“Retail, corporate and private banks were already under pressure to deploy new technologies and reshape their company cultures in order to compete with big tech firms and payment players. Now, as digital banking surges due to the coronavirus pandemic, this task is more pressing than ever,” said some part of the report.
Key findings from the report
- 66% of banking executives say new technologies will continue to drive the global banking sphere for the next five years while regulatory concerns around these technologies remain top of mind for banking executives (42%).
- 77% of bankers believe that unlocking value from AI will be the differentiator between winning and losing banks.
- 45% of respondents are focused on transforming their existing business models into digital ecosystems. Therefore, banks are expected to continue to adapt their internal structures to digital technologies in order to enhance customer experience, product offerings, and new revenue streams.
The backstory and the present concerns
Prior to the outbreak of the Coronavirus pandemic which has destabilised the global economy and raised major health and safety concerns, many banks around the world were already making major efforts towards the adoption of Artificial Intelligence in their daily operations. Bank customers were encouraged to make use of digital banking solutions in a bid to reduce traffic in banking halls.
To a large extent, this worked, although the pandemic really helped to accelerate the pace. However, the widespread adoption of Artificial Intelligence has not come without some concerns/challenges. According to the report by The Economist Intelligence Unit, data bias, “black box” risk, and lack of human oversight as some of the main concerns bothering bankers.
The report did, however, specify some regulatory guidelines on how best banks can deploy Artificial Intelligence, as you can see below:
- Ethics and fairness: banks must develop AI models that are ‘ethical by design’. AI use cases and decisions should be monitored and reviewed and data sources regularly evaluated to ensure that data remains representative.
- Explainability and traceability: steps taken to develop AI models must be documented in order to fully explain AI-based decisions to the individuals they impact.
- Data quality: bank-wide data governance standards must be established and applied to ensure data accuracy and integrity and avoid bias.
- Skills: banks must ensure the right level of AI expertise across the business in order to build and maintain AI models, as well as oversee these models.
Why it matters
Artificial Intelligence is expected to remain very relevant for banks, even after the COVID-pandemic must have finally been brought under control. Therefore, it is expedient for banks around the world to really develop their AI capacity in order to succeed both during and after the pandemic.
You may download Forging new frontiers: Advanced Technologies will Revolutionise Banking by clicking here.
NITDA launches technology and entrepreneurship scheme
The programme will create local content in Nigeria’s ICT space and jobs in the innovation and tech sector
The National Information Technology Development Agency (NITDA) has launched its Technology Innovation & Entrepreneurship Scheme that is specially designed for Information and Communication Technology (ICT) and Tech startups.
This was disclosed in a statement shared by the agency and signed by Head, Corporate Affairs, and External Relations, NITDA, Hadiza Umar. In the statement, she explained that the scheme, which targets young skilled Nigerians, would enable the digital economy needed for the growth of the nation’s economy.
She said, “It is part of Nigeria’s plan to create 100 million jobs in 10 years, and the program would be beneficial for ICT and tech startups in the nation. There is the need to build support systems that would help in reducing the barriers of entry for startups while increasing the capacity of hubs and startups to create new bankable products and services.
“NITDA initiated a scheme to provide opportunities for building the capacity of both hub owners and start-ups to ensure massive creation of technology entrepreneurs and jobs within the industry.”
According to her, the Digital economic Policy goes in line with the NITDA scheme which ensures skilled hub managers have the necessary support for tech startups and “build innovation ecosystems in their localities.
“It will also build the capacity of hubs to support startups and build local innovation ecosystems, encourage innovation, increase technology and entrepreneurship skills among aspiring and existing entrepreneurs” she added.
She also said the programme will help create local content in Nigeria’s ICT space, render services, and jobs in the innovation and tech sector. The hub managers are required to sign agreements with NITDA to enable them to train managers for other regions. Covering infrastructure needs like Internet and power supply.
“The participants will also be matched with mentors and guided by coaches as they build out their products and services. At the end of the training period, participants will be required to choose if they would like to begin a startup or to get a job,” she added.
She revealed that those who sign up will be placed in a six-month incubator programme which will allow them to gain skills and work experiences needed to build a digital economy. Interested participants are advised to apply, as the portal closes on the 24 of July. See the portal here