It’s a good time to be a shareholder. Despite the economic uncertainty caused by the bold reforms of the current administration, the largest and the most liquid firms on the NGXASI index are able to reward their owners in the form of bumper dividends.
According to data gathered by Chapel Hill Denham Limited, firms delivered N2.07 trillion, but the consumer goods sector suffered a deteriorating payouts as most of them booked huge foreign currency revaluation losses that the abrupt devaluation of the currency
Companies with dividends generally have consistent and substantial profitability to support their payouts, and investors are attracted to dividend paying stocks.
Banks lead dividend payout
Drilling down the numbers shows banks paid N984.88 billion in annual dividend to their owners.
The high interest rate environment and devaluation gains helped add strength to lenders’ earnings. The average industry annual dividend yield of 9.78 percent is the second highest on the NGXASI index.
The dominant cement makers- Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc- delivered a combined N594.96 billion to shareholders. The industry annual dividend yield stood at 3.21 percent.
Aradel Holdings Plc, Seplat Energy Plc, and TotalEnergies Marketing Nigeria Plc collectively paid N293.86 billion in annual dividend to their investors.
While the biggest telco firm MTN Nigeria recorded zero payout because of recurring net losses brought on by foreign exchange headwinds, peer rival Africa paid N159.38 billion in annual dividend.
Other sectors that rewarded shareholders from distributable profits are: Palm Oil, N76.34 billion; Infrastructure, N20.15 billion; Insurance, N15.51 billion; Aviation, N11.15 billion, Construction and Real Estate, N5.95 billion, Pharma, N2.81 billion, and Others, N4.09 billion, according to data gathered by Chapel Hill Denham.
Consumer goods firms dished out N19.32 billion. Only NASCON Allied Industries Plc, UNACN, and Unilever Nigeria out of the pack rewarded their owners.
“Banks have always offered attractive yields that beat the bench market. I am optimistic there is going to be an increase in payout this year as the foreign exchange stabilises,” said an analyst who does not want his name mentioned.
Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!
