Analysts say earnings not reflecting on market performance

Investors are set to earn over N780 billion as dividends from the 2021 financial year. So far, 16 companies across seven sectors – consumer goods, financial services, industrial goods, oil and gas, services, healthcare and IT – have earmarked a total of N782.192 billion as final dividends from last year’s activities

Under the consumer goods sector, Vitafoam has paid N1.876 billion, representing N1.5 per share while Dangote Sugar Refinery has proposed a final dividend of N12.147 billion or N1 per share just as Nestle Nigeria declared a N20.213 billion dividend or N25.5 per share.

NASCON Allied Industries and Nigerian Breweries are set to pay a dividend of N1.06 billion and N9.691 billion, representing 40 kobo per share and N1.2 per share respectively.

In the financial services sector, shareholders of United Capital, African Prudential, Guaranty Trust Holding Company (GTCO), Zenith Bank and United Bank for Africa (UBA) will receive a total dividend of N9 billion, N1 billion, N79.464 billion, N87.91 and N27.36 billion respectively. These represent N1.5 per share, 50 kobo per share, N2.7per share, N2.8 per share and 80 kobo per share in that order.

Also, Dangote Cement and Lafarge Africa, which are listed under the industrial goods sector, proposed a final dividend of N340.82 billion, representing N20 per share and N16.108 billion or N1 per share.

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Seplat Energy directors, on their part, have recommended a dividend of $0.426 per share (making a total of N250.677 million) while Transcorp Hotels declared a dividend of N716.977 million or seven kobo (N0.07) per share.

Neimeth International Pharmaceuticals also proposed an N132.941 million final dividend or seven kobo (0.07) per share, while MTN Nigeria Communications (MTNN) declared a final dividend of N8.57 per share, amounting to N174.44 billion.

Market analysts noted that dividend-paying stocks are very important for investors for many reasons. Specifically, Managing Director/CEO APT Securities and Funds Limited, Garba Kurfi, commended listed companies for posting impressive results but expressed concerns that the declared dividends have not reflected in the performance of the stock market.

According to him, these companies have declared impressive dividends to investors but “I do not know why the stock market did not respond to dividend payouts by Dangote Cement, Zenith Bank, among others.

“The likes of GTCO and UBA released their audited accounts after the close of trading last week, I am yet to see stock price appreciation. Lafarge Africa, last year, was trading at N31 and declared N1 per ordinary but this year. The company declared N2 this year while trading at N24 per share. The dividend by these companies has not been reflected in our domestic market.”

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Meanwhile, the Development Chief Executive Officer, NGX, Temi Popoola, said the NGX has continued to leverage technology to drive activities in the market.

According to him, the exchange strategy for 2022 is to keep building on the momentum on its digital journey across value chains. He added that there may be digitalised listings and digitisation of its products or offerings.

“This is important because the belly of the Nigerian demography is huge and the exchange currently, represented by older people, needs the young generation. And to bridge that gap, technology is needed,” he said.

While expressing confidence that few listings will take place on the platform of NGX, Popoola said the exchange is looking at diversifying listings across foods, power and agriculture to have a representation across different sectors.

The NGX boss added that the exchange will be partnering with the Securities and Exchange Commission (SEC) to launch a NASDAQ-style board.