Companies listed on the Nigerian Exchange (NGX) distributed over N1.5 trillion in dividends for the financial year ended 2023.
This substantial payout highlights the robust performance and shareholder value delivered by these companies, irrespective of the macroeconomic headwinds.
About 58 companies on the NGX have either distributed or plan to distribute dividends based on their 2023 returns. Leading the list is Dangote Cement Plc, with a total dividend distribution of approximately N511 billion, followed by Airtel Africa Plc, which will distribute N276 billion.
Beyond the sheer volume of dividends paid, assessing the return on investment (ROI) provides a comprehensive view of the value shareholders receive from a company. A crucial metric in this evaluation is the dividend yield.
Understanding Dividend Yields
Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.
It is calculated by dividing the annual dividends per share by the current stock price and is expressed as a percentage. This metric is particularly useful for investors because it shows the income an investment generates compared to its market price.
A higher dividend yield indicates a higher return on investment from dividends alone, without considering capital gains.
But for this analysis, Nairametrics focused on the share price of the companies on their ex-dividend date (ex-div). The ex-Div is the last share price of a company before it is adjusted for dividends. It is the price that reflects the most recent dividend yield before the marked down.
Top 10 Companies with Highest Dividend Yields
In this report, Nairametrics tracks the top 10 companies that generated the highest dividend yields on the NGX, based on their share price as of their ex-dividend date.
The ex-dividend date is the cutoff day when a shareholder must own a stock to be eligible to receive the upcoming dividend.
- Custodian Investment Plc – 8.56%
Custodian Investment Plc distributed a total dividend of N0.8 per share for the fiscal year, with an interim dividend of N0.15 and a final dividend of N0.65.
With its share price at N9.00 as of the ex-dividend date of June 13, 2024, it represents a dividend yield of 8.56%. The group distributed a total dividend of N5.9 billion for FY 2023, from its net income of N21 billion.
- Fidelity Bank Plc – 9.24%
Fidelity Bank Plc distributed a total dividend of N0.85, with an interim dividend of N0.25 and a final dividend of N0.60 for FY 2023.
With its share price at N9.00 as of the ex-dividend date of April 29, this represents a dividend yield of 9.24%.
The bank distributed a total dividend of N27.2 billion from its net income of N99.45 billion, marking a dividend payout ratio of 27.4%, the second highest among banking stocks.
- Access Holdings Plc – 9.33%
Access Holdings Plc, the parent group of Access Bank, distributed a total dividend of N2.1, featuring an interim dividend of N0.30 and a final dividend of N1.80. With its share price at N23 as of the ex-dividend date of April 12, 2024, the stock generated a dividend yield of 9.33% for FY 2023.
The group distributed N74.6 billion in total dividends for FY 2023, marking a dividend payout ratio of 12.1%, based on a net income of N619.3 billion.
- UPDC REIT – 9.65%
UPDC REIT distributed N0.41 in total dividends for FY 2023, with N0.19 as an interim dividend and N0.22 as a final dividend. With its share price at N4 as of May 17, 2024, the ex-dividend date, the stock generated a dividend yield of 9.65%.
The real estate investment trust paid out N1.09 billion in total dividends, from its net assets of N3.8 billion, marking a dividend payout ratio of 28.8%.
- GTCO Holdings – 9.79%
GTCO Holdings, the parent group of GT Bank, distributed N3.2 as total dividends for FY 2023. The group distributed N0.5 as an interim dividend and N2.7 as a final dividend.
With its share price at N33 as of April 29, the ex-dividend date, this represents a dividend yield of 9.79%. GTCO Holdings distributed a total dividend of N94.2 billion out of its net income of N539.7 billion for FY 2023.
- Presco Plc – 9.84%
Oil palm company, Presco Plc, distributed a total dividend of N26.3, featuring an interim dividend of N2 and a final dividend of N24.3. With its share price of N267 as of the ex-dividend date of May 15, the stock generated a dividend yield of 9.84% for 2023.
The company paid out N26.3 billion in dividends from its net income of N32.7 billion for 2023. This represents a dividend payout ratio of 80.5%, one of the highest in the country.
- United Bank for Africa – 11.89%
UBA Plc distributed a total dividend of N2.8 per share, with an interim dividend of N0.5 and a final dividend of N2.3. With its share price at N24 as of the ex-dividend date of May 13, 2024, the stock generated a dividend yield of 11.89%.
UBA Plc paid out N95.8 billion in total dividends for 2023, representing a payout ratio of 15.8% based on its net income of N607.7 billion for the year.
- Zenith Bank Plc – 12.27%
Zenith Bank Plc had the best dividend yield among banking stocks for FY 2023. The bank distributed a total dividend of N4 for FY 2023, with an interim dividend of N0.5 and a final dividend of N3.5.
As of April 26, the bank’s share price was at N33, translating to a dividend yield of 12.27%. Zenith Bank generated the highest net income in Nigeria in 2023, with N676.6 billion. With a dividend distribution of N125.6 billion, the bank had a dividend payout ratio of 18.6%.
- SFS REIT – 14.31%
SFS Real Estate Investment Trust distributed a total dividend of N14.5 for 2023, with its share price at N101 as of the ex-dividend date of April 22, 2024.
This translates to a dividend yield of 14.31%. In FY 2023, SFS REIT generated a net income of N317.5 million. With a total dividend distribution of N290 million, SFS REIT paid out 91.3% of its net income as dividends for 2023.
- Smart Products Plc – 40.00%
The smallest stock on the NGX, Smart Products, had the highest dividend yield for 2023, at 40%. The company paid a dividend of 8.00 kobo per share, with its share price at 20 kobo as of the ex-dividend date of June 24, 2024.
With a net income of N6.58 million, Smart Products Plc distributed a dividend of N3.6 million for FY 2023, translating to a dividend payout ratio of 54.7%.