Nigerian companies paid a total of N989 billion as dividends in the first 9 months of 2021 representing a 27% increase from the same period in 2021.
This is according to data spooled from the financial statements of the companies. Nairalytics maintains a record of dividends paid by Nigerian publicly quoted companies over the years.
The companies include 30 of some of the most capitalized companies on the stock exchange who paid dividends in the current year and in 2020.
Read: Dangote: Cement price from our factories is between N2,450 and N2,510 per bag, VAT inclusive
Some Nigerian companies pay dividends out of their full-year profits while others pay twice during the year, first out of their full-year and secondly in their half-year profits (interim dividends). Some dividends are also paid out of retained earnings in the event where the companies do not declare profits.
Top paying dividends companies
During the year, Dangote Cement paid about N272 billion in dividends, followed by MTN with a dividend payment of N212.7 billion. While Dangote Cement shareholders did not record a significant boost in their dividend payments, MTN shareholders recorded a 23% boost in dividend payments. No other company paid up to N100 billion in dividends during the year.
- Zenith Bank and GTCO, paid N94.2 billion and N79.5 billion in dividends during the year, while BUA Cement rounded up the top 5 dividend payers with N70 billion paid put.
- Stanbic IBTC, Access Bank and Nestle paid N54 billion, N30.2 billion and N27.5 billion respectively. While Lafarge and Seplat completed the top 10 dividend payers with N24.7 billion and N23.1 billion respectively.
- The top ten payers paid a combined N888.1 billion in dividends.
Read: Dangote Cement is creating its own luck
Follow the money
A growth in dividend payment especially in a year marred by the Covid-19 pandemic indicates strength and resilience in the financials of some of Nigeria’s largest companies. The significant size in dividends paid by companies like Dangote Cement and MTN also mirrors their humongous profits generated by the companies during the year.
- Dangote Cement for example posted a profit after tax of N272 billion, meaning it paid out almost all its profits generated during the year as dividends.
- MTN on the other hand generated a profit after tax of N205 billion representing a dividend payout ratio of 93%.
- Banks are often more conservative with GTB and Zenith paying out 39% and 41% of profits respectively as dividends.
- Nigerian companies are also mandated to deduct a withholding tax of 10% on dividend payments meaning the Federal Inland Revenue Service should have earned about N98 billion from the dividends paid this year.
To a discerning Investor, it is not just the absolute amount of dividend or the payout ratio that matters. Both Dangote Cement and MTN, in spite of their high payout ratio, had less than 6% yield each, whereas the 39%/41% payout ratios of GTB/Zenith translated to over 9% yield each. Any reduction in profit of Dangote Cement and MTN will threaten their already low dividend yield.
I’m more comfortable with a company with a low payout ratio, yet high yield.
Your write up should be analytical enough to enlightened ,but not to give a biased analysis that will lure potential investors to jump into a stock that might not be too profitable to them due to low velocity in earnings.
A balance view will make much interest to new comers to the stockmarket
A company paying out as much as even 70% of eearnings is on a dangerous mission,tranparency is needed
…The best performing Companies should be the ones that have geometric and progressive yearly growth and very elastic capital appreciation..for
the investors to see appreciable growth in their invested Capitals; not a stand still, kill and divide Companies..with stagnant or stunted growth… BABSOLAK
What’s the dividend paid by first bank per share.How can I claim my unpaid dividend