Dividend yield for Nigerian firms has grown on the back of low stock price as global geopolitical events and political uncertainties have continued to bedevil the economy.
With election around the corner amid heightened economic risks and socio-political tensions, analysts opined that the Nigerian equity market might not record any tangible improvement in the first quarter of 2019. However, optimism abounds that the local bourse would rebound starting from the second quarter.
BusinessDay investigated the best performing stocks in each sector with respect to dividend yield as this might probably serve as an opportunity which investors can leverage on.
The dividend yield is the financial ratio that measures the quantum of cash dividends paid out to shareholders relative to the share price. This metric is computed by dividing the dividend per share by the market price per share.
A company with a high dividend yields pays a substantial share of its profits in form of dividends. On the assumption that all other factors remain the same, investors wishing to utilize his or her portfolio to supplement income would likely prefer companies with higher yields.
Zenith Bank has the highest dividend yield in the financial services industry at 12.42 percent.
In the industrial goods sector, Lafarge Africa Plc, despite recording a whopping loss over a thousand percent tops its peers by having a yield of 11.65 percent.
In the health sector, GlaxoKlinesmith is the top performing stock with a yield of 62.5 percent.
In the oil & gas sector, Rakunity Petroleum Plc with a yield of 25 percent led its counterparts.
In the agriculture sector, Okomu Oil Palm Plc with a yield of 3.66 percent outpaces its peers to become the best dividend yield performing stock as at present.
For conglomerates, United Africa Company of Nigeria outperforms its peers to record 7.65 percent yield on dividends.
UPDC Real Estate Investment Trust, currently, tops the construction/real estate sector in dividend yield at 9.09 percent.
In the consumer goods industry, Dangote Sugar Refinery Plc had the highest dividend yield at 12.07 percent.
High dividend yield stocks are good investment options during volatile times, as these companies offer good payoff options. They are suitable for risk-averse investors. The caveat however is that investors need to check the valuation as well as the dividend paying track record of the company before taking decision.
