Nigerian companies record impressive dividend growth rates

AFRICAN STOCKS AND FINANCEOctober 12, 2023 at 12:33 AM UTC

A recent analysis conducted by Nairametrics has shed light on the consistent dividend payments made by some Nigerian-listed companies over the past five years (2018 to 2022). This group comprises approximately 32 companies hailing from diverse sectors, including financial services, manufacturing, telecoms, and consumer goods.

These steadfast dividend-paying companies collectively distributed N3.47 trillion in dividends during the five-year period, reflecting an average 5-year compound annual growth rate (CAGR) of 14.74%. The substantial total payout underscores their commitment to providing returns to their shareholders.

For investors, the dividend CAGR holds significance, as it can exert a substantial influence on long-term investment returns. The consistency of these companies in delivering dividends signals financial stability and a commitment to rewarding their shareholders, making them an attractive option for income-focused investors in the Nigerian market.

Key Takeaways

Dividends are important in stock investing because they give shareholders a steady source of extra money. Large corporations that make a lot of money and have stable finances usually pay significant dividends. Investing in these companies can benefit in two ways: your shares can become more valuable over time, and you get regular dividend payouts. In 2022, 71 companies in Nigeria from different industries like banking, telecom, and consumer goods, gave out a total of over N1.5 trillion ($1.6 billion) as dividends. Some of the top companies on this list were Dangote Cement, MTN Nigeria, Zenith Bank Plc, and others. This year, stocks with a market capitalization of over N1 trillion have emerged as the titans of the NGX. As of August, their total market capitalization stood at an eye-watering N25.1 trillion.