Fifty-seven companies listed on the Nigerian Stock Exchange have not paid dividend to their shareholders in the last five years, according to information obtained from the NSE on Tuesday.
The figure represents 28.9 per cent of the 197 companies listed in a document made available to our correspondent by the Exchange.
According to the Chief Executive Officer, NSE, Mr. Oscar Onyema, at the end of June, there were 255 listed companies on the Exchange.
However, some of the listed companies are currently under suspension and slated for delisting as a result of various issues ranging from restructuring, voluntary delisting and non-compliance with NSE’s post-listing requirements.
The 57 companies that have not been paying dividend are spread across different sectors on the main board of the NSE, with some of them yet to pay dividend for over 10 years.
Under the Beverages-Brewers/Distillers sub-sector, for instance, of the seven quoted companies, four have not paid dividend for up to 15 years.
The exceptions are Guinness Nigeria Plc, which last paid on November 2, 2012, and Nigeria Breweries Plc.
However, the last dividend payment date for Jos International Breweries was July 30, 2008.
According to the data, Champions Breweries Plc last paid dividend in 1986; Golden Guinea Breweries Plc, 1997; International Breweries Plc, 1997, and Premier Breweries Plc, 1995.
In the Banking sub-sector, which often dominates the activity chart on the Exchange, out of 13 banks, only two – Wema Bank Plc and Union Bank of Nigeria Plc – have not paid dividend in the last five years. Wema Bank last paid in 2004, while Union Bank stopped paying dividend after 2008.
As for the Pharmaceutical sub-sector, Evans Medical Plc, Nigeria-German Chemicals Plc and Pharma-Deko Plc did not pay dividend in the five-year period under review. The last time they paid was 2006, 2008 and 2005, respectively.
In the Petroleum and Petroleum Products Distribution sub-sector, while six companies paid dividend at various times in the last five years, Eterna Plc and Afroil Plc have not paid dividend for 14 and 21 years, respectively.
In the Construction/Real Estate sub-sector, four of six listed companies have not paid dividend in the last five years, the exception being Julius Berger Nigeria Plc and Roads Nigeria Plc.
The Chief Executive Officer, Maxifund Investments and Securities Limited, Mr. Okechukwu Unegbu, explained that the fact that a company had not paid dividend for years was not really a cause for alarm as it did not mean that the company was not making profit.
Unegbu, who stressed that he had not seen the data of the companies that had not paid dividend and could, therefore, not comment about specific cases, explained that dividend payment was only one of several reasons why people invest in shares.
“I think there are so many reasons for investing in or buying shares in any company. Dividend is just one of the reasons for investing in the company,” he said.
Unegbu, while explaining that each company had its own policy for dividend payment, said, “The fact that a company has not paid dividend for some years does not mean that the company is not doing well. They could even be doing well and the shareholders have said, ‘Okay, don’t pay us dividend; re-invest the money for a higher growth for us in our holding.’”
He added that while there was the likelihood that shareholders who were not enlightened might decide not to buy the shares of a company because it had not paid dividend for a long time, experts would be quick to point out the fact that such companies might have very good fundamentals or opportunities to grow.
According to him, when that happens, a shareholder can gain much more by selling shares than what he or she will gains through dividend payment.