• 1 year ago
Categories: Investments

Best Nigerian Dividend-Paying Stocks To Invest In

Investing in stocks is an actual business and not just a quote on a computer screen. The goal of any investor should be to purchase an asset for a price (market value) below what’s it’s actually worth (intrinsic value). Understanding the underlying business is central to this strategy.

A lot of it will depend on your interest levels, how much time and effort you want to put into something, and your risk tolerance.  The leverage that you get versus the risk ventured is far and way better than other investments that have far more risks. 

We are offering a 5-stocks  consideration to help you decide what to focus on.


1. Eterna Oil

This is the only penny stock in the oil and gas sector that had recently recorded improved numbers posted and supported share price after paying its first dividend in the last 10 years. The company is into petroleum products marketing and distribution, besides being into lubricant production. It has a potential to rally on the strength of its strong earnings and the resumed of dividend payment after many years.

Investors should look the way of this stock now. With a third quarter EPS of N1.29 and full year forecast of N1.50, dividend possibility of 40 kobo is high. The stock trades at 2.78x earnings with a dividend yield of 6.98%. For the technical position of the stock see the “Investing with numbers table.”


2. Aiico  

This insurance company’s recent dividend payment is a function of improvement in its earnings power which also is likely to support the expected 2016 financial year numbers. The company’s profitability level in the quarterly results has improved.

On the strength of its third quarter earnings per share of 41 kobo that is also already higher than the 2015 full year EPS of 18 kobo, the possibility of dividend in the range of 8 to 10 kobo is high as the expected full year EPS is projected to be in the region of 46 kobo.nThe stock trades at 1.41x earnings and with a dividend yield of 8.62%. The stock is coming out of its oversold region, as RSI is reading 43.36.


3. Sterling Bank

This bank occupied the seventh position in the market and fourth in its financial services sector with a dividend yield of 12%. Sterling bank has a strong customer relationship and focused on commercial and investment banking. Prior to this time, it has not been regular in rewarding shareholders due to its unstable performance in terms of earnings growth. However, in recent years the trend is changing as the bank rewarded investors in 2016, a trend expected to continue. 

The possibility of dividend cut is higher than an increase or remaining on the same level as previous year. The stock trades at 3.98x of earnings and is attractive for income investors and people playing it for long term.  See the investing with the numbers for technical position of the bank.


4. Africa Prudential

This company is a leading share registration service provider in Nigeria. It is the only one of its kind listed on the exchange, where its shares have been traded for four years now, during which time it has remained a delight of shareholders. Of particular interest to shareholders is the high dividend payout on the strength of strong earnings power, since Afriprud became a quoted company. 

The expected EPS is projected to be in the region of 52 kobo, and a dividend possibility of 30 to 40 kobo is high. Its earnings are relatively strong. The stock trades at 7.59x earnings and a yield of 14%. For dividend income, investors should look the way of this equity. This is the only company playing the investment world with free money.


5. NPF Microfinance  Bank

The Nigerian Police Force Microfinance Bank was in third position on the dividend yield table, with 13.89% yield as at the close of trading on February 7, 2017. Its third-quarter EPS of 30 kobo is already higher than the full year EPS of 21 kobo for 2015. Over the past seven years since it was listed on the exchange it has paid dividends consistently and made its report available as and when due.

On the strength of the expected full year earnings projection of 36 kobo, the possibility of dividend increase in the range of 15 to 20 kobo is high. The current P/E ratio of 3.60x is attractive, especially for income investors given that trading the stock is a bit difficult due to its volume.


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Best Nigerian Dividend-Paying Stocks To Invest In was last modified: October 9th, 2017 by Obiageli Asika