Excitement as equity investors to pocket N780 billion dividends

By Aduragbemi Omiyale

More than 780 billion naira will be pocketed by stock market investors in Nigeria in the form of dividends offered by various companies listed on the Nigerian Stock Exchange (NGX) Limited in the coming weeks and months.

The market is buzzing with activity following recent corporate dividends as shareholders rebalance their portfolios and take positions.

So far, 16 companies across seven sectors, including consumer goods, financial services, industrial goods, oil and gas, services, healthcare and IT, have paid a total of 782.2 billion naira for the final dividend payment for the year ended December 31. 2021.

The dividend has remained one of the key factors that traditionally drives stock market activity and facilitates equity investment decisions across the globe, and the Nigerian Stock Exchange is no exception.

A dividend is a payment made by a company to its shareholders, usually in the form of a distribution of profits. When a company makes a profit or surplus, it is able to reinvest the profit back into the business called retained earnings and pay out part of the profit as a dividend to the shareholders.

For the reporting period, in the consumer goods sector, Vitafoam paid N1.876 billion, or N1.50 per share. Dangote Sugar Refinery has proposed a final dividend of N12.147 or N1.00 per share, while Nestlé Nigeria has declared a dividend of N20.213 billion of N25.50 per share.

NASCON Allied Industries and Nigerian Breweries are set to pay dividends of 1.060 billion naira and 9.691 billion naira, or 40 kobo per share and 1.20 naira per share, respectively.

In the financial services sector, shareholders of United Capital, African Prudential, Guaranty Trust Holding Company (GTCO), Zenith Bank and United Bank for Africa (UBA) will receive a total dividend of N9 billion, N1 billion, 79,464 billion naira, 87 naira. 0.910 and 27.360 billion naira, representing 1.50 naira per share, 50 kobos per share, 2.70% naira, 2.80% naira and 80 kobos per share in that order.

In addition, Dangote Cement and Lafarge Africa listed in the industrial goods sector have offered a final dividend of N340.82 billion, representing N20 per share and N16.108 billion or N1 per share respectively. Seplat Energy will pay a dividend of 0.426% per cent, a total payout of 250.677 million naira in naira, while Transcorp Hotels, listed in the services sector, declared a dividend of 716.977 million naira or seven kobo (0. 07 nairon) per share. .

Neimeth International Pharmaceuticals has proposed a final dividend of N132.941 million or seven kobo (0.07) per share, while MTN Nigerian Communications (MTNN) has declared a final dividend of N8.57 per share, amounting to N174.442 billion naira.

Speaking on the development, NGX Managing Director Mr. Temi Popoola said that NGX has continued to be innovative and leverage technology to drive much more business in the market.

Mr. Popoola, while stating that the NGX strategy for 2022, said the exchange intends to continue the momentum of its digital journey through value chains, adding that there may be digitized listings and the digitization of its product or its offers.

He noted that this is important as the belly of Nigerian demography is huge and the exchange currently represented by the elderly, needs the younger generation to fill this gap, technology is needed and revealed that a lot of work will be on experience, retail sales, integration of its market with financial services players, notably banks.

While expressing confidence that few listings will take place on NGX’s platform, Popoola said the exchange is considering diversifying the types of listings into food, power, agriculture, thus having representation of GDP on the national stock exchange.

The NGX boss further added that the exchange will partner with the Securities and Exchange Commission (SEC) to launch a NASDAQ-style board – a technology board that will be better suited for tech companies to be flexible enough to also find a formation of capital on the stock market. such as attracting capital to Nigeria, for Nigerians in the Diaspora and for investors (foreign and local investors).

Additionally, market analysts have noted that dividend paying stocks are very important to income investors for many reasons, saying the reason is that the payment of dividends plays a role in stock valuation.

“Beyond valuation, dividend-paying stocks can be a good source of stable income streams. Many investors will want to invest in companies with a track record of growing dividends,” they said.

Mr. Garba Kurfi, Market Analyst and Managing Director/CEO of APT Securities and Funds Limited, praised the listed companies for publishing impressive results and accounts for 2021, expressing concerns that the dividend declared by these companies is not reflected in the trajectory of the stock market.

According to him, these companies declared impressive dividend payouts to investors, but I don’t know why the stock market did not react to the payout of dividends by Dangote Cement, Zenith Bank, among others. Although GTCO and UBA released their audited accounts after the close of trading last week, I have yet to see any stock price appreciation.

“Take, for example, Lafarge Africa last year was trading at N31 and declared N1.00 per ordinary share, but this year the company declared N2.00 and is trading at N24.00 per share. these companies has not been reflected in our domestic market.

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