There are many dividend paying stocks which may improve the personal finance of investors who take position on stocks, the majority of which are trading below fair value.
Some blue chip stocks mostly targeted by foreign portfolio investors (FPIs) are not quite profitable in terms of return on equities.
Nestle, for instance, has its net income dropping 51 per cent to N2.95 billion in the first quarter 2015. The stock has lost 18 per cent in the past 12 months. The shares of Guinness are down 11 per cent and those of Unilever 8.2 per cent.
Analysts at Renaissance Capital said “some consumer names are trading at 20 to 30 times earnings. They’re not cheap. If you’re buying a stock with a high price to earnings ratio, you’re likely taking a bet on 2016 and 2017.”
If properly managed, good dividends paying stocks trading at share prices – like Beta Glass, Okomu Oil, UACN, Vita Foam, Conoil, and several others – can improve the finances of individual shareholders better than investment in other instruments.
For two consecutive weeks Beta Glass topped the gainers chart on the Nigerian Stock Exchange (NSE) rising by 10.3 per cent to close at N33.40 per share from N33.00 per share at which it closed penultimate week.
The company, which proposed 62 kobo per share dividend to its shareholders for the financial year end of 2014, has fixed June 12, 2015 as the closing date for its register. Investors can take advantage of this dividends hand out.
Beta Glass reported N16.6 billion revenue in its full year result of 2014, a growth of 18 per cent from N14.09 billion in 2013. Profit before tax rose 63 per cent to N3.3 billion, from N2.05 billion in 2013.
Profit after tax increased 62 per cent, from N1.474 billion in 2013 to N2.391 billion in 2014. Earning per share jumped 62 per cent, from 295 kobo to 478 kobo.
The share price of Okumu Oil Palm Company also rose 6.4 per cent to close last week at N30.26 per share, from N28.55 per share at which it closed penultimate week.
Okomu Oil has shown that the lucrative business of palm oil refining and production has the potential to salvage the battered economy.
The company, established in 1976 as a federal government pilot project, aims to rehabilitate oil palm production in Nigeria, and has transformed into an economic success paying regular dividends to shareholders.
Ashaka Cement came third on the gainers chart rising 5 per cent to close at N21.50 per share from N20.47 penultimate week.
The company posted N4.5 billion profit in its 2014 financial year. It paid N4.5 kobo dividend on every ordinary share held, representing a 7.1 per cent increase on the previous year.
Conoil gained 4.9 per cent to close at N41.91 per share from N39.92 per share it closed penultimate week.
Conoil in the 2013 financial year paid N4 per share for every 50 kobo share per share held by shareholders. This was a promise kept after posting impressive performance across its business segments in the financial year ended December 2013.
A statement issued by Conoil said it would invest over N5 billion to build a new lubricant manufacturing plant and filling lines, in addition to the state-of-the-art lubricant plant in Apapa, Lagos, to significantly increase engine oil production.
The company projects an all-time high revenue from lubricant business predicated on the expected upsurge in demand by the automobile and industrial sub-sectors.
UACN came fifth on the gainers’ chart rising 3.0 per cent to close at N41.20 per share from N40.00N per share it had closed penultimate week.
The capital appreciation of these stocks is a direct outcome of their good dividend payout which the average investor can benefit from if the investor positions before the closure of register.
