Tuesday, January 15, 2019 01:50 PM / Invest Data
Dividend Yields on the Nigerian Stock Exchange have improved significantly as stock prices suffered decline in all but the first month of 2018, due to many factors ranging from the continuing rate hike in developed markets, oscillating oil price, mixed macroeconomic indices, capital outflow and uncertainties over the general elections that begins next month.
Dividend Yield measures how much cash flow you as an investor get for every Naira invested in a stock, besides measuring what percentage of return a company pays out in form of dividend.
This is one of the main factors you need to consider when investing in dividend paying stocks, because a higher Dividend Yield is considered desirable among income investors today, following which it is sometimes a driver of share prices.
In recent times, Dividend Yield on the NSE has continued to rise owing to the persistent free fall of equity prices. This is particularly true in the case of the financial services sector, given that banks and other financial services providers are the power houses of economic growth. They are also intermediaries and agents of development.
For investors interested in buying high dividend paying stocks having yields above the market average of 4.5%, bearing in mind the prevailing 11.28% inflation rate should see the table above for companies that have recorded the biggest jumps in yield over the period.
Dividend investing has become necessary in this prolonged bear market characterized by a decline in equity prices thereby eroding investors’ capital and confidence in the market, as well as the economy due to mixed macro-economic indices. This is made worse by a lack of clear economic direction that is showcased by fiscal policies of the government.
There are currently 53 stocks on NSE with yields of over 4.5% per year, led by healthcare products maker- GSK with a yield of 61.48%, resulting from the special dividend of N7.10 per share arising from the sale of a production plant, in addition to the 2017 full year regular dividend of 40 kobo. It was followed by cement manufacturer- Lafarge Africa with 13.27% yield to top the industrial goods sector.
In the other Financial Sector, United Capital took the lead with a 12.11% Yield, which ranked it third market-wide, followed by Zenith Bank, which topped its sector with 11.59%, while ranking fourth in the entire market. Learn Africa led the Services sector yields with 10.29% to occupy the fifth position.
Total Nigeria has the highest Dividend Yield in the oil/gas sector at 9.90%; just as Service sector stock- RedStar Express and NPF Micro Finance made the list with yields of 9.52% and 9.38% respectively.
Let the current Earnings Per Share and the Yield percentage guide you as you study the numbers on the table. For companies with December as year-end, third quarter 2018 EPS is the latest and current earnings.
RE: Invest 2019
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