United Capital potential 20% dividend yield looks juicy

United Capital potential 20% dividend yield looks juicy

The share price of United Capital Plc, a financial and investment services company is up 105 percent year to date (see chart), but that’s just half the story.


The company whose main focus is on investment banking, asset management, trusteeship, securities and insurance released third quarter 2016 results last week that validated the recent run up in its share price.


The financial services firm reported net income of N3.17 billion for the period (excluding onetime gains from asset sales that brought in an extra N1.5 billion).


With 6 billion shares outstanding United Capital could easily issue a 0.50k dividend or N3billion payout by year end to shareholders assuming no major issues arise in the fourth quarter.


This would be equivalent to a dividend yield of 20.3 percent at Thursday (Oct. 6), closing price of N2.46 per share.


United Capital dividend payout history suggests this is highly likely. In 2013 with Earnings per Share (EPS) of 44k UC paid out 25k in dividends. In 2014 EPS was 31k and dividend was 20k and in 2015 EPS came in at 43k and the dividend was 35k.


As at the 9 month period United Capital already has an EPS of 78k (including onetime gains from asset sales).


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