The List Of Companies That Take “Forever” To Pay Dividends

Investors in the Nigerian stock market expect to get in return for investing capital appreciation and dividends. The latter requires a bit more patience and is often at risk of being low yielding and can be eroded by inflation. This article is about how quickly you get paid dividends but not before we explain the concept of dividend yield.

Dividend yield as the name implies is the relationship between the amount of dividends you receive compared to the market value of the shares. So if a stock is currently worth N10 per share and the company declares a dividend per share of N1 then the yield is 10%.

A more appropriate yield for Nairametrics will always be the relationship between the net dividend (after deduction of WHT) you receive and the total cost of acquiring the stock. The higher the yield the more attractive a stock is for long term investors.

Dividend Payments

Quoted companies in Nigeria typically announce dividends same day or a few days after they release their annual reports. Part of what they announce is the closure date (date at which the register closes), AGM Date (when the shareholders will meet to approve the dividends) and Payment date (when the dividends will actually be paid). What they do not take note of is the day the dividend itself was announced.

Nairametrics began taking stock of dates dividends are announced this year and juxtaposed that to the payment dates of the dividends. We wanted to know how long it took companies to pay dividends after they must have announced it. This is important to us because of the time value of money. Dividend received early enough will always be better than dividends received much later. it is also an indication of how cash rich companies are. Some companies can declare dividends out of strong profits but may not have the cash to pay it.

On the average we realized companies took about 33 days between the day it was announced to when it is eventually paid. Some companies of course took longer.

No of days it takes to pay dividends from the date announced. Source: Nairametrics Research

No of days it takes to pay dividends from the date announced.
Source: Nairametrics Research

The chart above shows companies that take about 60 days and above to pay dividends from the date it was declared. At over 60 days these companies hold on to dividends at least 30 days longer than their peers. This of course is an obvious erosion of capital for retail investors who have to wait for another 60 days or more to get their dividends long after it has been announced. An early payment of dividends mean shareholders can reinvest their cash quickly enough and get the full benefit of the yield. A delayed dividend payment is tantamount to an erosion of value. Here is a list of the companies with payment days of above 60.

Company No of days
Transnationwide Express Ltd 136.00
MRS Oil Nigeria Plc 126.00
Nign Aviation Handling Co. Plc 118.00
Ecobank Transnational Inc. 111.00
Nigerian Breweries Plc 94.00
International Brew. Plc 93.00
NPF Microfinance Bank 93.00
Seven Up Bottling Company 91.00
AG Leventis Nigeria Plc 88.00
Forte Oil Plc 87.00
Julius Berger Nigeria Plc 79.00
Berger Paints Nigeria Plc 75.00
UACN 71.00
Greif Nigeria Plc 67.00
Mobil Oil Nigeria Plc 63.00
Conoil 60.00
Ugo Obi-chukwu

Ugo Obi-chukwu "Ugodre" is a chartered accountant with over 16 years experience in financial management, corporate finance and financial analysis. He is also a retail investor and a personal finance advocate with over a decade experience investing in the Nigerian stock market. Ugo is the founder/Publisher of Nairametrics and blogs regularly on the website.

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