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Dangote Cement, Zenith, GTB top as shareholders rake in N514 bn dividends in 2018

by Teliat Sule

May 27, 2018 | 9:18 am
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financial services, building materials sub sectors account for 78%

Shareholders of companies listed on the Nigerian Stock Exchange (NSE) have earned N513.75 billion as dividend income in 2018. We arrived at this figure based on the analysis of the different corporate actions announced so far supported by information and data extracted from the audited financial statements of listed firms for the year ended December 31, 2017. The amount of dividend income made by shareholders in the 2018 dividend season represents a 41 percent increase over N363.69 billion paid by similar firms in 2017 dividend season.

 

 

The analysis excluded the interim dividends declared by some firms at the end of the first quarter of 2018.

That companies paid more dividends in 2018 comes as a surprise to many because in 2016 up to the end of the first quarter of 2017, the Nigerian economy was in recession. In the first quarter of 2017, the Nigerian economy recorded a negative growth to the tune of 0.91 percent. It recovered in the second quarter when it posted a 0.72 percent growth in gross domestic product. The growth accelerated to 1.17 percent and 2.11 percent in the third and fourth quarters of 2017.

The top five highest dividends paying firms when measured in terms of the total dividends paid remained the same in 2018 as they were in 2017. Dangote Cement, Zenith Bank, Guaranty Trust Bank (GTB), Nigerian Breweries and the United Bank for Africa (UBA) topped the highest dividend paying firms. They collectively paid N373.74 billion dividends representing 73 percent of the total dividends paid in this dividend season. That was against N292.33 billion these companies paid in 2017 which amounted to 80 percent of the total dividends paid in that year’s dividend season.

In 2018, Dangote cement paid N178.95 billion as dividends and that represents a 24 percent increase over N144.84 billion paid in 2017 dividend season. Zenith Bank paid N76.92 billion in 2018 compared with N55.57 billion paid in 2017, amounting to a 38 percent increase over the previous year. GTB paid N70.63 billion in 2018, an increase of 37 percent over N51.50 billion paid same period in 2017.

The brewery giant, Nigerian Breweries paid N25.03 billion compared with N20.46 billion paid out to shareholders same period last year. Also, Africa’s global bank, the United Bank for Africa (UBA) paid N22.23 billion in 2018 in contrast to N19.95 billion paid in 2017, an increase of 11 percent.

Most of the companies that paid higher dividends recorded more revenues last year. Apart from that, majority of them are multinationals which traditionally have high dividend payout ratios, Kemi Akinde, a senior analyst with Meristem Securities said.

Some companies paid dividends because they made money from other business sources, for instance Lafarge and GSK, Akinde added.

Furthermore, deposit money banks, microfinance, and mortgage and firms engaging in financial related services, paid N204 billion which amounted to 40 percent of the dividends paid in this dividend season.

Firms in the building materials sub sector collectively paid N193.51 billion which amounted to 38 percent of the total dividends paid in the first five months of this year. Okomu and Presco, Nigerias topmost agric and agro-allied firms both paid N4.86 billion, representing just one percent of the dividends paid.

Also, insurance firms paid N5.64 billion which amounted to just 1 percent of the total dividends paid by quoted firms.

Nigerian Breweries paid N25.03 billion to account for 5 percent of the dividends paid in 2018. The firms listed under the food and beverages sub sector collectively paid N42.07 billion, translating to 8 percent of the corporate actions declared by quoted firms.

However, in spite of the increase in dividend payments to shareholders, the market sentiments have remained unchanged as the prices of equities continue of the downward trend.

As at the close of business on Friday 26 May 2018, the All Share Index (ASI) of the Nigerian Stock Exchange (NSE) retuned 2.83 percent while the market capitalisation of listed equities posted 4.66 percent year to date. Compared with the same period in 2017, both indicators returned 8.55 percent and 8.66 percent returns year to date.


by Teliat Sule

May 27, 2018 | 9:18 am
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