Investors in the Nigerian stock market have made bumper harvests from their holdings in listed companies so far in 2022, as they rake in over N1.24 trillion from dividend payments for the 2021 financial year.
According to data tracked by Nairalyitcs, the research arm of Nairametrics, Dangote Cement, MTN Nigeria, and Zenith Bank Plc led the list of companies with the highest dividend payment for the year under review.
The companies cut across most sectors, from manufacturing (FMCG and industrial), telecom, banking, oil and gas, and agriculture amongst other sectors. The year 2021 was a particularly impressive year for the companies, posting over N11 trillion in revenue and over N2 trillion in aggregate profit after tax.
Dividend payment is one of the ways stock market investors earn passive income, while companies also use this as an incentive to encourage investors, which is paid from the profit declared in that financial year. However, some companies do vote in favour of not paying dividends if the board believes the company needs cash, or there was a loss declared.
Below is an analysis of companies with the highest dividend payment in the 2021 financial year.
Dangote Cement – N340.81 billion
Cement manufacturing company, Dangote Cement declared a total dividend of N340.81 billion to its numerous shareholders having declared a dividend per share (DPS) of N20 for its total 17.04 billion units of shares listed in the stock market.
- The company increased its DPS from N16 declared in the previous year after its profit after tax increased by 32% from N246.1 billion to N364.4 billion in 2021.
- Similarly, the dividend payment made in the 2021 financial year represents 93.5% of the profit made in the same year.
- The dividend which is subjected to appropriate withholding tax is set to be paid to its shareholders on 15th of June 2022, after the Annual General Meeting (AGM) of the company.
- It is worth noting that the register of shareholders closed on May 31st, 2022.
MTN Nigeria – N267.1 billion
Telco giant, MTN Nigeria declared and paid a total dividend of N267.1 billion to its shareholders from its profits in 2021. The company declared an interim dividend per share of N4.55 and a final DPS of N8.57, bringing its total to N13.12 per 2 kobo ordinary share for its 20.35 billion listed shares.
- The dividend payment in 2021 represents a 39.6% increase compared to the N191.33 billion (DPS: N9.4) paid in the previous year.
- A further check also shows that the company paid 89.4% of its profit for the year to its shareholders as dividends.
- MTN Nigeria also posted impressive numbers as its profit after tax jumped by 45.5% from N205.2 billion recorded in 2020 to N298.65 billion in the review year. The final dividend per share of N8.57 was paid to its shareholders on 28 April 2022.
Zenith Bank – N97.33 billion
Tier-1 banking giant, Zenith Bank declared a total dividend per share of N3.1k for the financial year ended December 2021, representing a 3.3% increase compared to N3.0k paid in the previous year. The dividend payment sums up to N97.33 billion for its total 31.39 billion outstanding shares listed on the NGX.
- The most capitalized bank in the local equities market posted a 6.1% growth in its profit after tax from N230.57 billion to N244.56 billion in 2021. Zenith Bank paid 39.8% of its net profit to its shareholders as dividends for the financial year.
- However, the company was able to improve its retained earnings by N85.91 billion to stand at N198.36 billion as of December 2021.
- The final dividend was paid to its shareholders on April 6, 2022, which was subjected to appropriate withholding tax.
GT Bank – N88.29 billion
The recently restructured banking giant declared a total of N88.29 billion as dividend for the 2021 financial year from its N174.8 billion profit after tax posted in the year. The dividend payment represents 50.5% of the profit for the year.
- A further breakdown shows that GT Bank had paid an interim dividend of 30k during the half-year period of the year, before paying an additional N2.7 as final dividends, bringing the total sum to N3 DPS. This is the same amount paid in the previous year.
- This is following a decline in the bank’s bottom line as profit after tax declined by 13.2% from N201.44 billion posted in 2020 to N174.84 billion in 2021.
- The final dividend payment to its shareholders was paid on Friday, April 8, 2022 having been subjected to appropriate withholding tax.
Airtel Africa – N78.37 billion
Airtel Africa declared a total of $0.05 DPS (interim and final) for the financial year ended March 2022. Converting using the prevailing exchange rate, translates to N20.85 per share, which sums up to N78.37 billion.
- The telco giant and the most capitalized company in the stock market with over N6.64 trillion in valuation reports its financials in USD. Notably, its profit after tax skyrocketed by 82% to $755 million in 2021 from $415 million posted in the previous year.
- According to the disclosure released by the company on NGX, the final dividend will be paid on or around 22 July 2022.
- The dividend will be paid in US dollars, although Airtel Africa plc offer their shareholders the opportunity to elect to receive their dividend payments in GB pounds or Nigerian naira via currency elections.
Others on the list include BUA Cement (N46.8 billion), Nestle Nigeria (N40.03 billion), Stanbic IBTC (N38.87 billion), Access Bank (N35.55 billion), and UBA with N34.2 billion.
It is worth noting that companies like Industrial and Medical Gases Nigeria, MRS Oil Nigeria, and Trans-National Express voted to give bonus shares to their existing shareholders rather than financial compensation.
Samuel Oyekanmi does a great job of discussing the biggest dividend-paying companies in Nigeria.
I was especially interested to learn about Dangote Cement and Nestle Nigeria.
I think it’s essential for investors to be aware of these companies to make informed decisions about where to invest their money.
I have a few questions, though.
First, can Oyekanmi predict which companies will be the biggest dividend-payers in 2023?
Second, what are the risks associated with investing in these companies?
I’m interested to hear Samuel Oyekanmi’s thoughts on these questions.
Thanks for sharing this information!
I’m overwhelmed with joy with this testimonies so far, how do I involve myself in buying dividend stocks, and what is the best company to trade with, thanks.