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Top Nigerian (NSE) Dividend Stocks
UPDATED Aug 07, 2022
What are the best Nigerian (NSE) Dividend Stocks?
According to our Simply Wall St analysis these are the best Nigerian dividend companies. We look for companies with high quality dividends and healthy balance sheets to find the top Dividend Stocks.
Our criteria to find Top Dividend Companies
High Yield
- Companies with a high dividend yield are more attractive due to the higher expected income for each dollar invested.
- Yields vary between markets, so we focus on the top dividend payers in each market.
What do we look for?
- Is the yield in the top 25% of the market's dividend payers.
Consistent Dividends
- Companies with a strong track record of paying a consistent and growing dividend are the most attractive.
- If the dividend has been cut substantially in the past, then it's difficult to be confident about future payments.
What do we look for?
- Has the dividend been stable over the last 10 years.
- Has the dividend grown over the last 10 years.
Dividend Cover
- Ideally the company doesn't pay out all of its earnings, neglecting future growth.
- If a company is unable to afford its dividend, then it will probably lead to a dividend cut and share price erosion.
What do we look for?
- Are dividends covered by earnings.
- Are dividends forecast to be covered by earnings in the future.
Healthy Balance Sheet
- Investors want to make sure the company is positioned to cover its debts. Repayments on debt typically take priority over shareholder return initiatives.
What do we look for?
- Does the company have a manageable level of debt.
- Is the company able to cover its interest repayments.
3 companies meet this criteria in the Nigerian market
Guaranty Trust Holding Company Plc operates as a financial holding company for Guaranty Trust Bank Plc that provides commercial banking services in Nigeria, Ghana, Gambia, Sierra Leone, Liberia, Cote D'Ivoire, Kenya, Uganda, Rwanda, Tanzania, and the United Kingdom.
Dividend Criteria
Earnings Coverage
Growing Dividend
Future Dividend Coverage
High Dividend: GTCO's dividend (14.63%) is in the top 25% of dividend payers in the NG market (8.46%)
Notable Dividend
Stable Dividend
Rewards
Trading at 32.7% below our estimate of its fair value
Earnings are forecast to grow 22.72% per year
Risks
No risks detected for GTCO from our risks checks.
Stanbic IBTC Holdings PLC, a financial holding company, provides banking and other financial services to corporate and individual customers in Nigeria and internationally.
Dividend Criteria
Earnings Coverage
Growing Dividend
Future Dividend Coverage
High Dividend: STANBIC's dividend (9.68%) is in the top 25% of dividend payers in the NG market (8.46%)
Notable Dividend
Stable Dividend
Rewards
Price-To-Earnings ratio (6.9x) is below the NG market (7.3x)
Earnings are forecast to grow 20.53% per year
Risks
High level of non-cash earnings
United Bank for Africa Plc, together with its subsidiaries, primarily provides corporate, commercial, and retail banking services in Nigeria, rest of Africa, and internationally.
Dividend Criteria
Earnings Coverage
Future Dividend Coverage
High Dividend: UBA's dividend (13.79%) is in the top 25% of dividend payers in the NG market (8.46%)
Notable Dividend
Growing Dividend
Stable Dividend
Rewards
Trading at 51.4% below our estimate of its fair value
Earnings are forecast to grow 16.28% per year
Earnings have grown 10.9% per year over the past 5 years
Risks
High level of non-cash earnings