Dividend yield measures how much cash flow you as investors are getting for every Naira invested in a stock. It also tells what percentage return a company pays out in form of dividend. This is one of the main factors you need to consider when investing in dividend paying stocks, given that higher Dividend Yield has been considered a desirable among income investors today.
Dividend Yield on the Nigerian Stock Exchange (NSE) has in recent times continued to increase as a result of the ongoing equity price correction on the bourse, following which the down market has boosted yield, especially in the financial sector of the market. The banks and other financial services providers are the power houses of any economy growth, just as they are intermediaries and agents of development.
Investors interested in buying high dividend paying stocks with yields above the prevailing market average of 4.8%, money market fixed deposit and benchmark interest rate (Monetary Policy Rate) should see the table below for companies that have seen the biggest jumps in yield over the period.
Dividend investing has become necessary in this season when the market refuses to react positively to the outpouring of impressive corporate earnings, despite which equity prices continue to decline, thereby sending panic waves into the market and in the process triggering sell-offs in the months leading to next year’s general elections. It must however be noted that public confidence in the economy are looking up, helped by positive macro-economic indices driven by monetary policy and rising oil prices which was near $66 per barrel last week, as it inches towards the $70pb mark in the foreseeable future. Also, a higher oil prices may attract more inflow into the Nigerian economy.
Let the current earnings per share and the dividend yield guide you as you study the numbers in the table. For companies with December as it year end, third quarter 2017 and full year EPS are the latest and current earnings.