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Conoil is a Solid Buy for Investors Who Crave Dividends

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For investors who crave dividend paying stocks to add to their portfolio, ConOil Plc is a sure best as the downstream oil and gas firm has been consistently rewarding shareholders over the past decade.

“Come rain, come sun the company has maintained consistent dividend payment and the yield currently stands at 10 percent,” said analysts at Meristem Securities in a note to clients.

Of course, no firm makes such distribution without a steady earnings stream or stable cash flow as market participants perceive consistent dividend payment signals sound financial health.

The current economic dynamism and the upswing in crude oil prices that is leading to deregulation and liberation of the downstream oil and gas sector are expected to bolster earnings of sector players since they will be setting the price of their products.

In the last quarter of 2021, the company paid a dividend of N1.50 for each ordinary share, according regulatory filings.

The earnings season started a week ago and Conoil is among the majority of companies that beat analysts’ expectations.

The company saw net income surge by 70.50 percent to N1.81 billion in the first six months from N1.06 billion the previous year. Sales were up 16.80 to N56.24 billion as at June 2022.

Net profit margin moved to 3.21 percent in June 2022 from 1.56 percent as at June 2021.

The company’s shares have risen 17.19 percent so far this year, according to data from the Stock Exchange.

The NGX Oil and Gas Index has a year to date gain of 61.17 percent, outperforming the NGEASI index return of 16.27 percent.

Analysts say improved economic activities would also translate to higher volume sales, further pushing increasing turnover of Conoil.

“On a balance of factors, we expect both revenue and earnings growth for the majority of the downstream players. Given that international oil prices trends northward, this would translate to retail prices of deregulated petrol products staying elevated,” said analysts at Meristem Securities.

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