• Thursday, March 28, 2024
businessday logo

BusinessDay

13 firms to pay N527.92 billion to shareholders

shareholders

Thirteen companies will pay a combined final dividend of N527.92 billion to shareholders as they continue to remain profitable amid a tough and unpredictable macroeconomic environment.

It is paramount directors of companies reward owners out of distributable profit because some investors are attracted to a dividend payment.

But Francisco Modigliani and Metro Miller in their 1958 Irrelevance Theory stated that dividend is irrelevant because the value of a firm is expected stream of future earnings discounted at the present value.

A breakdown of payment shows Dangote Cement Nigeria Plc, the largest producer of the building material in the country, and most capitalized firm, has proposed a final dividend of N16 per N0.50 ordinary shares, totalling N272.64 billion.

This translates into a payout ratio of 70.17 percent, as the cement maker continues to maintain an aggressive policy. It has a dividend yield of 8.21 percent.

Zenith Bank of Nigeria Plc’s has declared a final dividend of N2.50 on every ordinary share, totalling N78.50 billion, and it has a yield of 11.22 percent.

The lender’s profit before tax increased by 16 percent to N231.68 billion in December 2018 as against N199.32 billion recorded the previous year. The uptick at the bottom line was largely driven by improved efficient as evidenced in optimization of cost to income ratio, cost of risk, and reduction in interest expense.

Guaranty Trust Bank (GTBank) Plc has proposed a final dividend of N2.45 on every N0.50 ordinary shares, totalling N72.10 billion, and a yield of 7.40 percent.

Stanbic IBTC Holdings Plc will pay its owners a final dividend of N1.50 on every N0.50 shares, totalling N15.36 billion, and it has a yield of 2.06 percent.

The lender has the strongest return on asset equity in the entire banking industry as full year profit spiked by 28.15 percent to N43 billion while net profit margin increased to 16.10 percent in December 2018 from 13.82 percent as at December 2017.

Nestle Nigeria Plc will be pay shareholders N36.50 for every No.50 shares held, totalling N28.93 billion, and a yield of 3.87 percent.

The consumer goods giant has been recording strong margins and double digit growth in profit as it continues to use its diversified product brand to increase share of the market.

The company, like most of its peers, has a payout ratio of over 100 percent.

Seplat Corporation Petroleum Development Company (“Seplat) Plc has proposed a final dividend of N15.25 on every ordinary share, totalling N8.97 billion while yield stood at 3.02 percent.

The upstream oil and gas giant’s net income dipped but it posted stellar numbers at the operating levels, thanks to strong growth in revenue.

A sluggish economic growth couldn’t hinder companies from rewarding their owners, but they would have done better if the economy is benign.

The consumer goods firms are more expose to macroeconomic shocks as they grapple with low consumer purchasing power and a decrepit infrastructure that balloon cost of production.

In terms of income, Nigerians are becoming increasingly poorer, with 8,000 citizens jumping into the extreme poverty train on a daily basis, according to Brookings Institute.

With 87 million Nigerians living below the $1.90 baseline, almost one out every two national (44 percent) lives in extreme poverty. Incidentally, India, which is second in the poverty pedestal, has 57 million people that are extremely poor, representing just 4.4 percent of its 1.3 billion population.