If you were thinking of buying a stock this month and you are a dividend investor, there are a few top dividend-yielding stocks where the ex-dividend date hasn’t yet elapsed.
Ex-dividend describes a stock that is trading without the value of the next dividend payment. The ex-dividend date or “ex-date” is the day the stock starts trading without the value of its next dividend payment. This means that if you buy the stock before this date, you are entitled to very juicy dividend returns.
A buyer who purchases a stock on or after its ex-dividend date is not entitled to the declared dividend – it is owned by whoever owned the stock the day before the ex-dividend date.
BusinessDay analysis of best stock investment opportunities in the month of May sought to find the highest-yielding stocks in terms of dividends with close of register not too far away.
Investors could buy said stocks and wait till the payment date to receive a considerable return on investments from dividend income.
Regency Allied Insurance led the pack for the best opportunity in the Nigerian Stock Exchange with a N0.03 dividend at a current price of N0.23, leading to a dividend yield of 13.04 percent which ranks as one of the best on the local bourse.
The dividend yield is the ratio of a company’s annual dividend compared to its share price. The higher the stock price, the lower the dividend yield. This is because dividends are announced and paid once while stock prices change rapidly during a trading day.
Regency Allied Insurance’s registrars are set to close registration on May 17, 2019 and hold the company’s Annual General Meeting (AGM) on June 18 while shareholders receive dividends a day after.
UAC of Nigeria was another top-yielding stock that would be unavailable at the end of the month if investors fail to take advantage of the 9.14 percent dividend yield.
The company is set to pay N0.64 as dividend on June 27, 2019 and was selling at N7 at market close on Monday.
Chemical and Allied Paints plc was the next best bet in the market which is open till the last day of the month. It has a dividend yield of 8.53 percent and traded at N34 on Monday.
The company is set to pay N2.9 on June 21, 2019 after its AGM.
Caverton completes the list with 8.33 percent dividend yield but the logistic company closes its register on Wednesday.
Obinna Uzoma, a Lagos-based market analyst told BusinessDay that “most investors focus on the blue-chip companies for dividends rather than pay attention to smaller companies where the stock prices are low and dividend yield is high”.
“Because everyone wants to buy the big companies to earn dividends there, the dividend yield begins to drop as stock prices rise due to the buying pressure. This is why I think the best companies to earn decent dividend yields are typically smaller companies with low prices,” Uzoma said.
IFEANYI JOHN
