Excitement as Stock Investors to Pocket N780bn Dividends

By Aduragbemi Omiyale

More than N780 billion will be pocketed by stock investors in Nigeria as dividends proposed by various companies listed on the Nigerian Exchange (NGX) Limited in the coming weeks and months.

The market has been bubbling with activities as a result of the recently proposed dividends from companies, with shareholders rebalancing their portfolios and taking positions.

So far, 16 companies across seven sectors including consumer goods, financial services, industrial goods, oil and gas, services, healthcare and IT, have paid out a total of N782.2 billion as the final dividend payout for the year ended December 31, 2021.

The dividend has remained one of the key factors that traditionally drive stock market activities and aids investment decisions towards stocks across the globe, and the Nigerian bourse is not an exception.

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business called retained earnings and pay a proportion of the profit as a dividend to shareholders.

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

NASCON Allied Industries and Nigerian Breweries set to pay dividends of N1.060 billion and N9.691 billion, representing 40 kobo per share and N1.20 per share, respectively.

Under 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, N79.464 billion, N87.910 and N27.360 billion, representing N1.50 per share, 50 kobo per share, N2.70 per cent, N2.80 per cent and 80 kobo per share in that order.

Also, Dangote Cement and Lafarge Africa listed under the industrial goods sector proposed a final dividend of N340.82 billion, representing N20 per share and N16.108 billion or N1 per share, respectively. Seplat Energy to pay a dividend of $0.426 cent per cent, making a total payout of N250.677 million in naira, while Transcorp Hotels, listed under services sector declared a dividend of N716.977 million or seven kobo (N0.07) per share.

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

Speaking on the development, the Chief Executive Officer, NGX, Mr Temi Popoola, stated that the NGX has continued to be innovative and leverage technology to drive much more activity in the market.

Mr Popoola while stating that NGX strategy for 2022 said the exchange intends to keep building on the momentum on its digital journey across value chains adding that there may be digitalized listings and digitization of its product or offerings.

He noted that this is important because the belly of the Nigerian demography is huge and the exchange currently represented by older people, needs the young generation to bridge that gap, technology is needed and revealed that lots of work will be on the experience, retail, integration of its market to financial service players, especially banks.

While expressing confidence that few listings will take place on the platform of NGX, Popoola said the exchange is looking at diversifying the types of listings across foods, power, agriculture, hence having representation of GDP on the nation’s bourse.

NGX boss further added that the exchange will be partnering with the Securities and Exchange Commission (SEC) in launching a NASDAQ style board- a technology board that will be suited better for technological companies to be flexible enough to find capital formation on the exchange as well as attract capital into Nigeria, for Nigerians in the Diaspora and for investors (foreign and local investors).

Furthermore, market analysts noted dividend-paying stocks is very important to income investors for many reasons, saying that the reason is that dividend payment is playing 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 history of growing dividends,” they said.

Market analyst and Managing Director/CEO APT Securities and Funds Limited, Mr Garba Kurfi commended listed companies for posting impressive results and accounts for 2021, expressing concerns that the declared dividend by these companies did not reflect in the trajectory of the stock market.

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

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