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Friday, February 3, 2023

Big Bank Dividends Comparison: GTB, Zenith, UBA, FBNH and Access

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If you are a value investor looking at Banking stocks and wondering which of the names to snap up, how do you make an informed determination, especially if big bank dividends are a major criterion?
At MoneyCentral we decided to look at dividends announced by the top 5 biggest banks as well as the dividend yields for each of them to help make a determination of the best risk-reward play for investors.
Dividends are money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves).
They can be a huge incentive to own stocks and are one of the reasons people typically buy stocks, the other being capital gains and banks have been on a rally recently as we reported last week.
Guaranty Trust Bank (N2.80)
Guaranty Trust Bank (GTB), the largest Nigerian bank by market capitalisation paid a final dividend of N2.50k per unit of ordinary share held by shareholders in addition to interim dividend of 30k per unit of ordinary share bringing total dividend for 2019 final year to N2.80k per ordinary share.
Zenith Bank (N2.80)
Zenith Bank Plc, paid a final dividend of N2.50 per share, bringing the total dividend payment for the 2019 financial year to N2.80 per share with a total value of N87.9 billion.
UBA (N1.00)
United Bank for Africa (UBA) Plc posted a profit before tax of N111. 3billion for the financial year ended December 31, 2019. Also, in its tradition of rewarding shareholders, the bank proposed a final dividend of 80 kobo for every ordinary share for the year. When combined with the interim dividend of N0,20 per share, it brought total dividends to N1 per share for 2019.
Access Bank (N0.65)
Access Bank paid an interim dividend of 25 kobo per share to its shareholders and announced a 40 kobo final dividend, bringing the total dividend for the 2019 financial year to 65 kobo.
FBN Holdings (N0.38)

FBN Holdings announced it would pay a dividend of N0.38 per share to its shareholders for Full Year 2019.
Looking at the above data one could surmise that it’s a straightforward conclusion that GTB, Zenith are tied for the best dividend plays, followed by UBA, Access and FBNH.
But it would not be quite correct to look at the nominal dividends without looking at the dividend yields for each company.
The dividend yield is dividend expressed as a percentage of a current share price. It tells you how much dividend income you receive in relation to the price of the stock, so buying quality stocks with a high dividend yield can provide a good source of income.
When you decide to look at this metric and compare all 5 large cap bank stocks you get a different result on a trailing dividend yield calculation.
The stocks closed trading on Friday at GTB: N24, Zenith: N16.9, UBA: N6.65, Access: N7.10 and FBNH: N5.35.
On a trailing basis this is equivalent to dividend yields of GTB: 11.6%, Zenith: 16.5%, UBA: 15%, Access: 9.1% and FBNH: 7.1%.
This means the top bank dividend stocks today would be Zenith, followed by UBA, GTB, Access and FBNH.

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