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By Chinwendu Obienyi and Chukwuma Umeorah
Amid the increasingly harsh operating environment, BUA Foods, Transcorp Power and 17 other quoted compaies have announced plans to pay dividends to their shareholders.
Distributing dividends is a way for companies to share their profits with their shareholders, typically in the form of cash payments or additional shares.
Hence, this announcement indicates that these companies have performed well enough to generate profits that can be distributed among their shareholders.
According to a document seen by Daily Sun at the weekend, other companies poised to pay dividends to shareholders include; May&Baker, Abbey Mortgage Bank, Fidson Healthcare, MRS Oil Nigeria, Nigerian Aviation Handling company (NAHC0), CWG Plc and LivingTrust Mortgage Bank.
Others are; Julius Berger, UAC Nigeria, McNichols, Transcorp Hotels, Okomu Oil, Beta Glass, Skyway Aviation Handling company, Transnational Corporation, Unilever Nigeria, Stanbic Holdings and Wema Bank.
For example, BUA Foods in its financial report for the audited financial results for the twelve months period ended December 31, 2023, proposed a dividend of N5.50, Transcorp Power on its part, recommended a dividend of N3.13, May&Baker recommended 0.30 kobo, MRS Oil proposed N2.36, Abbey Mortgage proposed 0.04 kobo, Fidson recommended 0.60 kobo while NAHCO proposed N2.54 to its shareholders.
The Board and Management of CWG Plc is considering a dividend of 0.16 kobo, LivingTrust also recommended 0.03 kobo, Julius Berger is proposing N3 dividend, Stanbic Holdings proposed N2.20 dividend while Wema Bank recommended 0.50 kobo dividend to its shareholders.
The companies further added that subject to appropriate withholding tax and approval, the final dividend will be paid to shareholders whose names appear in the Register of Members as at the close of business at different given dates.
Dividend distributions can be seen as a sign of financial health and stability, as well as a way to reward investors for their investment in the company.
Thus, the announcement made by these companies will go a long way in putting smiles to investors who had clearly thought that the companies might not pay dividends due to the weak macroeconomic conditions such as FX illiquidity, rising inflation, energy crisis, insecurity and other challenges which bedeviled the nation’s economy in 2023.
Furthermore, the announcement will at least reduce the uncertainty surrounding investments made in banks after the Central Bank of Nigeria (CBN) begun initiating stringent vetting processes for share investments in banks.
Speaking to Daily Sun, the President, Association for the advancement of the Rights of Nigerian Shareholders (AARNS), Dr Faruk Umar, noted that dividend payment is an important component of an investor’s investment strategy which provides both financial rewards and confidence in the company’s performance and prospects.
He said, “You and I know that dividend payments provide shareholders with a regular income stream. This can be particularly beneficial for investors seeking steady income, such as retirees or those looking to supplement their salary. Companies that consistently pay dividends demonstrate financial stability and predictability, which can be reassuring for investors, hence, the announcement is coming at a right time when shareholders need it for one thing or the other”
