Dividend yield for Nigerian stocks has grown on the back of low stock prices following the recent bear dominance at the domestic bourse which pushed a number of equities to new lows.
Analysis of the dividend yield, an estimate of the dividend only return of a stock investment, revealed that Zenith Bank, Rakunity Petroleum, McNichols, Okomu Oil and May & Baker are the top performers in their respective sectors.
Dividend yield is the ratio of a company’s dividend per share to its stock price, and is represented as a percentage. On the axiom that dividend remains unchanged, the yield will rise when stock price falls, and vice versa.
Dividend yield tends to be unusually high for stocks that are falling quickly simply because there is an inverse relationship between yield and share price.
A company with a high dividend yields pays a substantial share of its profits in form of dividends. Investors wishing to utilize his or her portfolio to supplement income would likely prefer companies with higher yields ceterisparibus. However, dividend yield might not reflect stock fundamentals and overall performance.
Despite oil prices above budget benchmark, improved earnings scorecard of blue-chip companies and IMF upward revision of Nigeria’s growth rate to 2.1 percent, performance of the equity market still remain lacklustre.
The benchmark index gained a mere 39 basis points after Thursday’s (April 18) trading, with year-to-date and one-year return down by 4.64 percent and 26.48 percent respectively, an indication that the bourse is in dire need of vigour to spur performance.
Nigeria’s second-biggest lender by market capitalization, Zenith Bank has the highest yield in the financial services at 13.37 percent on Wednesday, compared with UBA (12.88%), GTB (7.90%), Access (7.30%) and First Bank (3.42%) in the tier-one space.
The lender’s shareholders approved a final dividend of 250 kobo per share in addition to the 30 kobo per share earlier paid as interim dividend, bringing dividend pay out to 280 kobo per share in full year 2018, compared with 270 kobo in the preceding year.
Among the drug makers, May and Baker Nigeria Plc outshines peers with a yield figure of 7.69 percent relative to GlaxoklineSmith (5.43%), Fidson (3.53%) and Pharmdeko (3.33%).
May & Baker’s directors proposed for shareholders’ approval 20 kobo per share in 2018, same as 2017, the highest pay-out since 2014.
Lafarge’s dividend yield after Thursday’s trading stood at 12.67 percent, topping Cutix (12.5%), Bergers Paints (7.74%) and Cap (7.35%) in the industrial goods sector.
Shares of the cement market shed 4.17 percent after Thursday’s trading to N11.40, and has lost 3.61 percent year-to-date and whopping 74 percent in one year.
McNichols Plc had highest yield at 8.62 percent in the consumer goods space simply because its low stock price trading at 58 kobo. The sugar maker is trailed by Dangote Sugar (7.72%), FMN (6.1%), and Nascon (5.19%).
In the agriculture sector, Okomu Oil Palm Plc with a yield of 3.75 percent outpaces its rival Presco (3.19%) to become the best dividend yield performing stock as at present. The palm oil has been flat at N80 close to a month.
Rakunity Petroleum Plc, the least-capitalized firm in the oil & gas sector, has a yield figure of 22.73 percent compared with peers – Total (8.67%), 11 Plc (4.71%) and Conoil (8.7%) and Seplat (2.23%). Shares of the indigenous oil marketing firm have been dormant at N0.40 for more than nine months.
ISRAEL ODUBOLA
