Shareholders of MTN Nigeria Communications Plc and 11 other quoted companies on the Nigerian Exchange (NGX) Limited will be receiving a total of N142.697 billion as interim dividend pay-out for the first half of the year, ended June 30, 2021.
Dividend has remained one of the key factors that traditionally drive market activities and aid investment decisions towards stocks across the globe, and Nigerian bourse is not an exception.
A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business called retained earnings and pay a proportion of the profit as dividend to shareholders.
Dividend payments allow shareholders to benefit from earnings growth through both interim and final dividends. Interim dividends can follow the same strategy as final dividends, it is a dividend payment made before a company’s annual release of full-year financial statements. More often, interim dividends are usually paid after the half-year financial statement has been released.
The other companies; Stanbic IBTC Holdings, Access Bank, Zenith Bank, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), Total Nigeria, Meyer Plc, Custodian Investment, Northern Nigeria Flour Mills (NNFM) and Consolidated Hallmark Insurance have declared interim dividends in the first half of the year ended June 30, 2021. The dividends were paid out of profits earned in the first half of the year.
For the period under review, MTN Nigeria in line with its dividend policy, the board of directors proposed an interim dividend of N92.615 billion, representing N4.55 per share to be paid out of distributable net income, higher than N3.50 per share paid the previous year.
Stanbic IBTC Holdings declared an interim dividend of N1.00 per share, amounting to N11.106 billion while Access Bank, Zenith Bank and GTCO proposed an interim dividend of 30 kobo each, amounting to N10.664 billion, N9.419 billion and N8.829 billion, respectively.
Also, UBA, Total Nigeria, Meyer, Custodian Investment, NNFM and Consolidated Hallmark Insurance offered an interim dividend of 20 kobo, N4.00, N1.50, 10 kobo, 15 kobo and 0.02 kobo per share, amounting to N6.840 billion, N1.358 billion, N0. 797 billion, N0.588 billion, N0.267 billion and N0.214 billion, respectively.
Market analysts noted that the economy is recovering, with the rate of COVID-19 infections slowing, reflecting the growing pace of vaccination across the world.
Also, in the National Bureau of Statistics (NBS) Q2, 2021 GDP numbers, real GDP expanded, making it the third successive quarter of expansion. According to the report, real GDP grew by 5.0 per cent year-on-year, representing the slow but steady economic recovery. GDP growth underperformed analysts estimate due to lower-than-expected crude oil production as well as drag in the agriculture sector.
The chief operating officer of InvestData Consulting Limited, Ambrose Omordion said that dividend payment in equity investment is as old as the stock market itself which is a function of company profitability at any given time.
He stated that the key to any successful portfolio is stable growth and additional income from interim or full year dividends that gives investors the flexibility to earn some cash for reinvestment or to meet their personal needs, saying that investors are advice not to overlook the opportunities for high dividend yield in the market regardless of the expected dividend cut in some industries due to prevailing economic situation and other reasons.
The chief executive of Access Bank, Herbert Wigwe stated that the Bank recorded a very strong performance in H1 2021, achieved through our unique business model that supports the corporate and retail value chains throughout the African continent and beyond.
He said that “With improving profitability, resilient capital position and a robust, diversified balance sheet, the Group is on track to deliver on its vision to be the World’s Most Respected African Bank.”
Speaking on H1 financials, Group chief executive officer of Guaranty Trust Holding Company, Mr Segun Agbaje said, “The results reflect our commitment to building on our track record of solid financial performance, and our capability to constantly innovate will ensure we stay ahead of the curve at all times.
“We are counting on the enduring support of our loyal customers and the hard work of our dedicated staff to continually make end-to-end financial services easily accessible to everyone and to create the best outcomes for all our customers and the communities in which we operate.”
He further stated that, “Looking forward, we are focused on bringing to bear the full benefits of our new corporate structure by consolidating our leading position in all the economies where our franchise operates. We will also diversify our earnings from core banking, continue to empower businesses across Africa and beyond, and generate long-term returns for our shareholders.”