It was a brief trading week as the Federal Government of Nigeria declared Tuesday 20th and Wednesday 21st July 2021 as Public Holidays to commemorate the Eid el-Kabir celebration. A total turnover of 896.174 million shares worth N5.235 billion in 11,714 deals were traded during the past week by investors on the floor of the Exchange, in contrast to a total of 1.008 billion shares valued at N10.923 billion that exchanged hands in the preceding week in 17,297 deals.
The NGX All-Share Index and Market Capitalization appreciated by 1.90% to close the week at 38,667.90 and N20.147 trillion respectively. Similarly, all other indices finished higher with the exception of NGX Insurance and NGX ASeM indices which depreciated by 0.74% and 0.31% respectively, while the NGX Growth Index closed flat.
Be that as it may, the immediate outlook for stocks remains bleak as institutional investors continue to remain on the sidelines. Regardless of the current positive boost in market sentiments, analysts have predicted that bulls are likely to alternate in the stock market for a few more weeks (or months) before they dominate.
As companies declare their half year results, some will have these results audited and then declare interim dividends. There are also those stocks that have their year-end on June 30th who might also declare their final dividends.
What are interim dividends and why is it important?
According to Investopedia, an interim dividend is a dividend payment made before a company’s annual general meeting (AGM) and the release of final financial statements. This declared dividend usually accompanies the company’s interim financial statements.
This is important because among other reasons, it helps to provide a short term returns to investors which might come in handy in terms of meeting up with short term needs. For example if you are an investor with cash that you have no immediate use but looking for quick return which you can use to meet expenses such as school fees, vacation etc. then interim dividend may just be a sweet spot.
Another positive for targeting interim dividends is that it may also come with capital appreciation, just like it did in the third quarter of 2021. A payout that delivers a dividend yield of about 5% payable within three months of it being declared is as good as 20% return when annualized.
In light of the above, naijabusiness.com.ng believes that the following under listed stocks will announce interim dividends this year, 2021. This prediction is based on the antecedents or historical pattern of the listed companies.
Sequel to this, naijabusiness.com.ng warns that the list below is inexhaustible and that this piece of write up is not an investment guide or advice. The list here is to only give the needed insight into stocks that over the years have returned interim dividends to its shareholders. To take further actions as whether to invest in these stocks or not, it will be advisable to consult a trusted and reputable broker for more advice.
The telecoms giant had consistently paid out interim dividends in the last two years, from N2.95 per share in 2019 to N3.50 in 2020. In light of this, it is likely that the firm will do the same this year if not more. Recall that the company reported a 42.53% surge in its profit to N74 billion in the first quarter of the year (Q1 2021). Its revenue during the aforementioned period surged to N385 billion.
Nestle Nigeria Plc
Nestle Nigeria is a reliable consumer goods company and is known for its regular dividend and interim dividend payment. The firm has paid out an average of N23.3 per share in interim dividends in the last three years. It paid N20 per share as interim dividend for HY 2018 and by HY 2020, the figure increased by 25% to N25 per share.
The company grew its revenue by 24% to currently stand at N87 billion in its Q1, 2021 results. PAT also grew by 11% from approximately 11.2 billion to 12.4 billion.
This is the most capitalized bank listed on the Nigerian Exchange and is also a regular interim dividend payer. The bank has maintained an average interim dividend payout of N0.30 per share in the past three years.
The first-quarter result of the bank reveals a 9% decline in PAT. However, other financial metrics show that the tier 1 bank is positioned to declare an interim dividend in the coming weeks, with its Return on Equity at 26.0%, Return on Assets at 4.3%. As we expect an interim dividend declaration, we however do not expect its interim dividend payout to increase as a result of the decline in its PAT.
Zenith Bank Plc
Zenith Bank has maintained an average of N0.30 interim dividend payment per share in the past three years. The bank’s first-quarter result revealed a decline in gross earnings by 5.86% from N166 billion to N157 billion. However, its PAT grew by 5.02% to N53.06 billion majorly attributable to an increase in net fee and commission income by 103.51%. • From the result, we see an optimization in the cost of funds and improvement in non-interest income which supported the bottom-line growth.
Others on our radar include,
- Nigeria Breweries Plc with an average interim dividend payout of N0.45 in the past three years.
- Stanbic IBTC
- Access Bank Plc
Note: It is also important to note that Total Nigeria Plc on the 22nd of July, 2021, announced an interim dividend of N4 per share for HY 2021.