Investors and shareholders continue to anticipate interim dividends as the half-year 2024 earnings season draws near, even in light of the listed firms’ increasing losses in 2023, which continued into Q1 2024 as a result of policy changes and other macroeconomic challenges.
The companies’ interim dividend payment trends and the remarkable performance of a few listed companies in Q1 2024 – which exceeded estimates and are probably going to surpass 2023 figures – may be the source of this optimism.
Based on their 2023 trends and current-year performance, the companies evaluated by The News Chronicles are expected to issue interim dividends during the first half of 2024.
When the NGX All-Share Index (NGXASI) and its component stocks are declining, it becomes more attractive to generate passive income from high-quality dividend equities.
In particular, the NGXASI has decreased from its Q1 2024 position by 4.61% to 33.39%; yet, this is still more than the 19% 6-month year-over-year rise that was noted in 2023.
SEPLAT (+49.35%), PRESCO (+86.01%), OKOMU (+1.92%), ZENITH BANK (-7.12%), UBA (-14.23%), STANBIC (-25.34%), GTCO (+8.64%), ACCESSCORP (-17.93%), FIDELITYBK (-8.76%), and CUSTODIAN (+8.89%) are among the stocks expected to pay interim dividends for the half-year ending June 30, 2024.
Investors who purchase any of these equities should anticipate receiving dividend income, which will offset any diminishing capital gains observed in certain of these stocks.
SEPLAT
This year, SEPLAT has performed exceptionally well, rising 49.4% YtD to a 52-week high of N3,450. With a dividend payment of N145.24 per share in 2023 (three cents per share quarterly plus an additional three cents in Q4), the company continues to have an excellent payout history. Despite a N2.9 billion loss after taxes, this continued in Q1 2024 with a 3-cent dividend, or N44.54 per share. With a 105% payout ratio, SEPLAT paid out N85.55 billion in dividends in total in 2023. With N232 billion in retained earnings, SEPLAT is probably going to continue paying dividends in Q2. The company gives investors a strong return with a 4.21% dividend and a 49.4% share price increase.
PRESCO
PRESCO has had a stellar year, with its stock climbing to N359 from a 52-week low, achieving an 86% YtD gain. The company offers a 10% dividend yield. Last year, PRESCO paid an interim dividend of N2 and a final dividend totaling N34.3 billion, with a payout ratio of 110.5% of its N32.86 billion post-tax profit. By Q1 this year, PRESCO had already reached 73% of last year’s profit, suggesting strong potential for future dividends. However, the company needs to manage its payout ratio carefully due to a negative sustainable growth rate of -6.02%.
Custodian Investment Plc
It is anticipated that Custodian Investment Plc will keep paying its interim dividends. It distributed a 15 kobo interim dividend and a 65 kobo final dividend to shareholders last year. A bright picture for this year is established by the company’s impressive performance in Q12024, which saw it achieve more than half of its N81.5 billion post-tax profit from 2023. Due to its 8.61% yield, investors who prioritize income find the company to be appealing.
Okomu Oil
Okomu Oil, a major palm oil producer, is likely to maintain its interim dividend payments in 2024. Last year, it paid an interim dividend of N4.50 and a final dividend of N14 per share, totaling N17.649 billion with an 85.5% payout ratio. By Q1 2024, Okomu had achieved 75% of its 2023 post-tax profit of N20.647 billion, indicating strong performance. The stock offers a 7% dividend yield.
Access Holding
Access Holding may declare an interim dividend for H1 2024, despite CBN’s directive against dividends from FX gains. In 2023, Access paid N74.645 billion in dividends, including a 30 kobo interim and an N1.80 final dividend, representing 12% of its post-tax profit. Given its strong Q1 2024 performance, investors are optimistic about continued dividends.
Fidelity Bank
With a 25 kobo interim and 60 kobo final dividend, Fidelity Bank paid N27.210 billion in dividends last year, or a 27% payout ratio. Fidelity is anticipated to continue its dividend trend in 2024, having achieved a 19% sustainable growth rate and an N31 billion post-tax profit in the first quarter of 2024. Even with an 8.8% YtD fall in share price, overall returns would be increased if dividends were maintained.
GTCO
In Q1 2024, GTCO reported a noteworthy post-tax profit of N457.125 billion, far surpassing the N94.2 billion dividend paid in 2023 (which comprised an interim dividend of 50 kobo and a final dividend of N2.70). This impressive performance points to more substantial dividend payouts in 2024.
UBA
In 2023, UBA paid N95.8 billion in dividends, second only to Zenith Bank’s N125.588 billion, with a 13% dividend return. It appears that UBA will continue to pay dividends this year based on its solid financials and high yield.
Stanbic IBTC
Stanbic IBTC, which paid both interim and final dividends, has the highest payout ratio (34%) of all the banks in 2023. Stanbic is well-positioned to continue paying dividends, with Q1 2024 profits coming in close to the N48 billion distributed as dividends last year.
Zenith Bank
With a post-tax profit of N676.909 billion, Zenith Bank outperformed all other banks. Zenith is expected to continue paying dividends and could announce an interim dividend for H1 2024 after matching its 2023 dividend payout in Q1 2024.
