The 5 Best Dividend-Paying Shares on the Nigerian Stock Exchange revealed. To find the top dividend stocks on the Nigerian Stock Exchange, we analysed them using both fundamental and technical metrics.
This is a complete guide to the 5 Best Dividend-Paying Shares on the Nigerian Stock Exchange.
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In this in-depth guide you’ll learn:
- What are Dividend-Paying Shares and How Do Dividends Work?
- The 5 Best Dividend-Paying Shares on the Nigerian Stock Exchange
- How to choose the Best Dividend-Paying Shares in Nigeria
- The Best Share Brokers in Nigeria
What are Dividend-Paying Shares and How Do Dividends Work?
Shareholders get dividends when a firm distributes a part of its profits to them. They are paid by some of the most popular shares in Nigeria, but not by others.
Dividends are paid to shareholders in the form of cash or additional shares of stock. However, cash is the most ordinary form of payment.
The concept of a dividend is straightforward: when a business has surplus funds, it may choose to distribute a part of those funds to its shareholders. The company sets aside a specific amount of money each year and distributes it to its shareholders at predetermined intervals.
BUA Cement Plc (NGX: BUACEMENT)
Nigeria is home to BUA Cement PLC, a cement manufacturing company. The BUA Group, which includes BUA Cement Plc, is a Nigerian industrial conglomerate that operates cement mills in both northern and southern Nigeria.
With a market value of NGN 2.35 trillion or around 8.67% of the Nigerian Stock Exchange equity market, BUA Cement Plc is the fourth most valuable firm on the NGX at present.
The share price of BUA Cement, which began the year at 67.05 NGN, has climbed by 3.36%, placing it at the 51st position on the NGX in terms of year-to-date performance.
| Growth, Valuation, Trading | Information |
| Share Price | 69.30 NGN |
| 52-week Range | 60.35 – 74.50 NGN |
| Market Capitalization | 2.35 trillion NGN |
| Earnings Per Share | 3.24 NGN |
| Price/Earnings Ratio | 21.39 |
| Dividend Yield | 3.75% |
| Gross Turnover | 4.29 million NGN |
Airtel Africa Plc (NGX: AIRTELAFRI)
As a major provider of telecommunications and mobile money services in 14 African countries, Airtel Africa is especially well-established in East Africa, Central Africa, and West Africa.
Mobile phone, internet, and mobile money services are just a few of the many telecommunication options that Airtel Africa makes available to its customers throughout Africa and beyond.
The Group’s goal is to keep providing a simple and user-friendly service to its patrons, and one way to do so is to reduce the length of their travels.
With a market capitalization of NGN 7.16 trillion, Airtel Africa Plc is the largest firm listed on the Nigerian Stock Exchange. This represents about 26.7% of the entire equities market on the NGX.
| Growth, Valuation, Trading | Information |
| Share Price | 1,905.40 NGN |
| 52-week Range | 601.00 – 1,905.40 NGN |
| Market Capitalization | 3.1 trillion NGN |
| Earnings Per Share | 68.36 NGN |
| Price/Earnings Ratio | 27.87 |
| Dividend Yield | 2.60% |
| Gross Turnover | 42.4 million NGN |
Prestige Assurance (NGX: PRESTIGE)
Prestige Assurance Plc is a Nigerian general insurer that provides a range of alternative coverage options. The business also handles claims and manages its liquidity by investing any surplus cash in fixed deposits, bonds, and treasury bills.
Prestige also provides lease financing, risk management counsel, insurance policy audits, and educational programming for its clientele. Insurance for businesses, factories, drivers, and homeowners is all available via this firm.
At a market capitalization of NGN 4.77 billion, or around 0.018% of the total value of the Nigerian Stock Exchange, Prestige Assurance Business ranks as the 83rd most valuable company on the NGX.
| Growth, Valuation, Trading | Information |
| Share Price | 0.36 NGN |
| 52-week Range | 0.36 – 0.51 NGN |
| Market Capitalization | 4.77 billion NGN |
| Earnings Per Share | 0.04 NGN |
| Price/Earnings Ratio | 8.26 |
| Dividend Yield | 4.17% |
| Gross Turnover | 142,993 NGN |
Dangote Cement Plc (NGX: DANGCEM)
Throughout Nigeria and the rest of Africa, Dangote Cement Plc serves the cement, limestone, coal, and real estate sectors by manufacturing and selling cement and related products. Dangote Industries Limited runs the company as an affiliate, and its administrative office is in Lagos, Nigeria.
With a current market value of NGN 4.52 trillion or around 16.9% of the whole Nigerian Stock Exchange equity market, Dangote Cement is the second most valuable stock on the NGX.
| Growth, Valuation, Trading | Information |
| Share Price | 265 NGN |
| 52-week Range | 240.00 – 300.00 NGN |
| Market Capitalization | 4.52 trillion NGN |
| Earnings Per Share | 21.22 NGN |
| Price/Earnings Ratio | 12.49 |
| Dividend Yield | 7.55% |
| Gross Turnover | 7.42 million NGN |
Neimeth International Pharmacy Plc (NGX: NEIMETH)
Neimeth International Pharmaceuticals Plc manufactures and distributes pharmaceuticals and animal health products. The Company’s business is split into the Pharmaceuticals Product Group and the Animal Health Product Group.
The Pfizer trademark is used for human and veterinary pharmaceuticals, including tablets, capsules, ointment/cream, powder, injectables, and oral liquids that the company manufactures, promotes, and distributes.
With a market value of NGN 2.94 billion or around 0.011% of the equity market on the NGX, Neimeth International Pharma is the 92nd most valuable stock on the exchange.
| Growth, Valuation, Trading | Information |
| Share Price | 1.55 NGN |
| 52-week Range | 1.36 – 2.25 NGN |
| Market Capitalization | 2.94 billion NGN |
| Earnings Per Share | 0.02 NGN |
| Price/Earnings Ratio | 88.07 |
| Dividend Yield | 4.52% |
| Gross Turnover | 441,189 NGN |
How to choose the Best Dividend-Paying Shares
When compared to bonds, dividend investing is a more stable and reliable approach to building wealth over the long term. However, excellent dividend-paying firms might be difficult to uncover.
Given this, we have compiled some information to help share traders choose dividend-paying shares to trade on the Nigerian Stock Exchange.
Overall Trends in the Sector
If you start by researching the best-performing sectors and the firms within those sectors that regularly pay dividends, you will have a good foundation from which to build your shortlist of stocks.
You should not only be familiar with the industries that have shown impressive performance in the past. You should also be familiar with the industries that are poised for growth and sustained profitability in the years ahead.
After narrowing down your search to a certain industry, you can filter the firms in your results by their dividend yields, which refers to the overall%age of the share price that is paid out in dividends annually.
Dividend Yields
The dividend yield is a key indicator of the profitability of an investment in the form of dividends. Stocks in the utilities and commodities trading industries often provide the highest dividend yields overall.
Finding growth firms with a high dividend yield could be challenging and may need you to be patient with market volatility. Large-cap companies with a high dividend yield may be a good option if you would rather have more stable returns.
Strong Cash and Low Earning Expectations
Consideration of a company’s potential for sustained profitability is essential when assessing dividend payers.
Any business may have a successful quarter occasionally, but only those who have shown sustained growth year after year deserves consideration. For this reason, it is recommended that investors look for firms that project a long-term profits growth rate of between 5% and 15%.
But tread carefully, since earnings disappointments are almost certain to ding the stock price for businesses whose growth surpasses 15%.
Keep clear of Debt
Paying dividends is a good sign, but investors should stay away from corporations with elevated levels of debt. The profitability of a stock is just one factor to consider. Stocks having a high Return on Equity (ROE) and minimal debt can be a good target.
Companies with a low debt load are preferable since their interest payments are cheaper. Interest payments are less likely to have an impact on dividends if most of a company’s funding comes from stock rather than debt, as indicated by a low debt to equity ratio.
Consider the Long-Term Profitability of the Company
Dividends are payments made from a company’s earnings to its stockholders. To this end, it is crucial to identify and prioritize businesses that are likely to provide strong long-term returns.
Long-term investing in dividend-paying equities is the ideal strategy. Long-term success is more likely for businesses that have strong foundations and management, as well as a favourable environment (inclusive of favorable government legislation and a thriving secondary market).
Check the Earnings per Share (EPS)
A company’s profits per share may be calculated by dividing its net income by its total number of outstanding shares. Forward earnings per share (EPS) is a measure of a company’s profitability that considers projections for future net income.
Evaluate the Price to Earnings Ratio (P/E Ratio)
The price-to-earnings ratio (P/E ratio) measures the value of a firm by comparing its market capitalization to its per-share profits. This ratio might help you determine whether the price you have been quoted for a firm is fair.
Knowing the average P/E ratio in the industry might help you determine whether a firm is a suitable investment. The opposite is true for low P/E ratios, where companies with high P/E ratios are undervalued.
The Best Share Brokers in Nigeria
In this article, we have listed the best brokers which offer share trading to traders. We have further identified the brokers that offer additional services and solutions to traders.
Best MetaTrader 4 / MT4 Share Broker in Nigeria
Overall, FXCM is the best MT4 Share broker in Nigeria. FXCM is a well-known NDD broker that has been operating since 1999 and boasts an MT4 trade execution time of less than 31ms.
Traders in Nigeria may take advantage of FXCM’s reputable services and a wide range of CFD and forex products.
Best MetaTrader 5 / MT5 Share Broker in Nigeria
Overall, JustForex is the best MetaTrader 5 Share broker in Nigeria. MetaTrader 5 is available on all JustForex’s platforms, so clients can engage in mobile trading, social trading, and more from the convenience of their own devices.
To assist Nigerian traders in finding the best dividend stocks, JustForex provides access to extensive solutions including Expert Advisors (EAs), MQL5, many timeframes, drawing tools, analytical tools, and a variety of technical indicators.
Best Share Broker for beginners in Nigeria
Overall, OANDA is the best Share broker for beginners in Nigeria. OANDA provides a proprietary trading platform that is both user-friendly and robust, in addition to a few resources for learning about foreign exchange.
Nigerians can quickly and easily learn the basics of trading analysis, trading platforms, and capital management with OANDA.
Best Low Minimum Deposit Share Broker in Nigeria
Overall, InstaForex is the best Low Minimum Deposit Share Broker in Nigeria. For both novice and experienced traders in Nigeria, InstaForex provides four dynamic trading accounts.
As a Nigerian trader, you could anticipate instantaneous order execution and zero-pip spreads on currency pairs like the Euro to US Dollar.
Best ECN Share Broker in Nigeria
Overall, Pepperstone is the best ECN Share broker in Nigeria. If you are a Nigerian looking for an ECN broker, Pepperstone is your best bet. Over 80 instruments are available for trading with leverage of up to 1:400 and spreads starting at 0.0 pips for Nigerian traders.
Best Islamic / Swap-Free Share Broker in Nigeria
Overall, SuperForex is the best Islamic / Swap-Free Share broker in Nigeria. Muslim traders who adhere to Sharia law may open a Swap-free Standard, ECN, or ECN Mini Account with SuperForex.
Standard Account traders may anticipate fixed spreads from 1 pip, while ECN Account traders can anticipate variable spreads from 0 pips.
Best Share Trading App in Nigeria
Overall, Fidelity Investments is the best Share trading app in Nigeria. Any Nigerian investor who prefers to do all their business from the convenience of their smartphones could do so using Fidelity’s mobile platform.
In addition to real-time stock quotations, the Fidelity app offers Nigerians market news, industry films, and more.
Best NGN Trading Account Share Broker in Nigeria
Overall, HFM is the best NGN trading account Share broker in Nigeria. As a popular CFD and Forex broker, HFM is authorized by the Financial Services Commission of Australia (FSCA) and offers trading on more than a thousand products using MetaTrader 4 and MetaTrader 5.
Best Lowest Spread Share Broker in Nigeria
Overall, Exness is the best lowest spread Share broker in Nigeria. Exness makes it simple for Nigerians to open an account denominated in the local currency, and then to trade among more than 278 different financial assets.
Nigerians who like to engage in in-depth fundamental and technical analysis may do so with the help of Exness, a MetaTrader-only broker that offers extensive research.
Best Nasdaq 100 Share Broker in Nigeria
Overall, BDSwiss is the best Nasdaq 100 Share broker. More than a thousand products, including the widely traded Nasdaq 100 index, are available for trading with BDSwiss, a reputable CFD and FX broker.
With competitive spreads, acceptable margin requirements, and in-depth technical and fundamental research, investors may trade NASDAQ 100 as a CFD in addition to trading shares of companies that make up the index.
Best Volatility 75 / VIX 75 Share Broker in Nigeria
Overall, AvaTrade is the best Volatility 75 / VIX 75 Share broker in Nigeria. There are a few overseas markets available to Nigerians trading on AvaTrade, including the VIX 75
AvaTrade equips traders with the training, manuals, and software they need to make smart choices in the market. When trading on the volatile CFD market, AvaTrade’s many available indicators are invaluable.
Best NDD Share Broker in Nigeria
Overall, Axi is the best NDD Share broker in Nigeria. Axi is a leading No-Dealing-Desk broker due to its access to the markets and the liquidity provided by 14 different banks across the world. Tight spreads and minimal commission rates, starting at $3.5 per side, are what traders should anticipate here.
Best STP Share Broker in Nigeria
Overall, FOREX.com is the best STP Share broker in Nigeria. With a trust rating of 99, FOREX.com is widely considered to have superior Straight Through Processing (STP) execution on a range of financial products.
FOREX.com provides its customers with three different retail accounts and a commission-free spread starting at 0.3 pips.
Best Sign-up Bonus Broker in Nigeria
Overall, XM is the best sign-up bonus broker in Nigeria. Once a Nigerian has signed up for a real account and had their information validated, they are eligible for XM’s $30 sign-up bonus without making a deposit. Next, there is a 50% deposit bonus available.
Conclusion
The payment of dividends is a signal of confidence in future success. A company’s fundamentals may be gleaned from its willingness and ability to pay dividends reliably over time, as well as from its potential to increase these payments.
However, Nigerians need to do more research than just looking at dividends to evaluate whether a firm is a suitable match for their portfolio.
Frequently asked questions
Is it wise to put money into stocks that yield dividends?
Paying dividend stocks that might also gain from rising prices is a great option for investors right now.
If a stock does not pay a dividend, why should an investor purchase it?
Dividend-free stockholders would rather see the companies they own reinvest their earnings. They wager that the company’s stock price will rise because of these investments, increasing their earnings potential.
Do dividend investments include the potential for both profit and loss?
Yes, dividend-paying shares have the potential for both profits as well as losses. There are several situations, such as a decline in the general stock market, in which an investment in dividend stocks might result in a loss.
Do stock prices decline after dividends have been distributed?
When a stock becomes an ex-dividend, the market often discounts it by the amount of the dividend paid to reflect the fact that new owners will not receive the dividend.
How is a dividend on shares distributed?
Divide the total dividends paid (including interim payments) by the number of shares outstanding to get an idea of how much cash a company is returning to shareholders.
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