Dividend payment is one of the ways that investors in Nigeria earn income on their investments, considering the bearish performance of the Nigerian equity market to date. A major consolation for Nigerian investors to hold onto their stocks is the possibility of receiving dividend payments from the companies they have invested in.
In anticipation of the HY 2021 results of listed NGX companies, investors will look out for companies likely to pay interim dividends and begin to take position.
With this in mind, Nairametrics has selected blue-chip companies listed on the NGX that are likely to pay interim dividend for the half-year financial period.
The list was prepared based on companies that have paid interim dividend over the course of three years ranging from 2018 to 2020, while also considering their financial state based on Q1 2021 results.
Here are the companies likely to declare interim dividends in H1 2021, in order of their market valuation.
MTNN Plc became a listed company on the Nigerian Exchange in May 2019. The telecoms giant has maintained an average interim payout of N3.23 in the past two years. MTNN Plc’s market valuation currently stands at N3.318 trillion.
In 2020, the company recorded the highest ever revenue by a Nigerian listed entity, as it reported revenue growth of 15.1% to stand at N1.3 trillion.
MTNN Plc has recorded growth in its dividend payout over the course of the 2 years within which it has been listed, from N2.95 in HY 2019 to N3.50 in HY 2020.
Also, in Q1 2021 the company recorded a 42.53% growth in Profit After Tax and Earnings per Share of N3.62 compared to N2.54 posted in Q1 2020. The stock currently trades at N163.00.
Nestle Nigeria Plc
Nestle Nigeria Plc is a company in the consumer goods sector that has been consistent with dividend payment. The company recorded a strong 24% year-on-year revenue growth and 11% growth in profit after tax in the first quarter of 2021. Nestle’s market valuation currently stands at N1.11 trillion.
The company has performed impressively in terms of dividend payout, paying an average of N23.3 interim dividend in the past three years. It grew its interim dividend from N20 paid in HY 2018 to N25 by HY 2020. Nestle Nigeria closed at N1,400 per share as of Friday, 25th June 2021.
Guaranty Trust HoldCo Plc
GT Bank is the most capitalized bank listed on the Nigerian Exchange valued over N840 billion. The bank has also maintained an average interim dividend payout of 30 kobo per share in the past three years.
A cursory look at the first quarter financials of the tier 1 bank shows a 9% decline in profit after tax. However, other financial metrics show that the tier 1 bank is positioned to declare an interim dividend in the coming weeks, with its Return on Equity at 26.0%, Return on Assets at 4.3%, Full Impact Capital Adequacy Ratio at 26.1% and Cost to Income ratio at 42.6%.
It is worth noting that trading of GT Bank shares was earlier suspended and delisted on the 24th of June 2021, while Guaranty Trust HoldCo was listed on the same day at N28.55.
GT HoldCo is currently trading at N30.
Zenith Bank Plc
Zenith Bank is one of the major financial institutions in the country, valued at N737.82 billion on the Nigerian Exchange Group. The tier 1 bank has maintained an average of 30 kobo interim dividend payment per share in the past three years. Zenith Bank has been consistent in its dividend policy and its reward payout to its investors.
The bank’s result showed that profit after tax grew by 5.02% to N53.06 billion in Q1 2021, recording an EPS (Earnings Per Share) of N1.69, which is 4.97% higher than N1.61 recorded in the corresponding period of 2020, despite a reduction in gross earnings.
From the result, we see optimisation in the cost of funds and improvement in non-interest income which supported the bottom-line growth. At the time of writing this article, Zenith Bank closed trading at N23.80.
Nigeria Breweries Plc
Nigerian Breweries Plc, the pioneer and largest brewing firm in Nigeria has paid an average of 45 kobo interim dividend per share to its investors in the past three years. Nigerian Breweries Plc currently has a market valuation that stands at N471.82 billion.
It also posted a 38.6% year-on-year increase in profit to N7.66 billion for the first quarter of 2021, up from the N5.5 billion profit reported in the corresponding quarter of 2020.
The company’s share price has increased by 6.88% year to date closing at N59.85 as of 25th June 2021, while it posted an Earnings per Share of 96 kobo as of March 2021.
- Stanbic IBTC Plc
- Access Bank Plc
- Custodian Plc
- UBA Plc
What you should know
- By way of definition, dividends are payments made by publicly-listed companies as a reward to investors for putting their money into the venture.
- Interim dividends are dividend payment made before a company’s annual release of full-year financial statements. More often, Interim dividends are usually paid after the Half-Year financial statement has been released.
Why this matters
As we venture into the Half Year period of the year 2021, many shareholders are expectant of returns on their investment and potential investors are on the lookout for stocks/investment options to buy into for either capital appreciation or dividend returns.