These are stocks that offered their investors the highest dividends for every naira invested in 2020 based on announced dividends so far in 2021.
For an investor interested in dividend income, the dividend yield is a good metric to measure the profitability of his choice of stock. Dividend yield shows the amount of cash an investor will be getting back for every unit of money invested. Investors can make returns on their stock investments in two ways, dividend income or capital appreciations.
Whilst investors focused on capital gains saw their equity wealth increased in 2020 on the back of the 62.42% growth in equity market capitalisation on the NSE according to the CEO of NSE; dividend-focused investors are starting to receive announcements of proposed dividends on their stock holdings for 2020.
An analysis of the Dividend yield of the stocks listed on the Nigerian Stock Exchange whose dividends were announced in 2021 showed the following as the 5 top best stocks on the NSE based on their dividend yield in 2020:
To determine the dividend yield, we divided the dividend per share by the market price per share. This ratio shows the return an investor gets on every naira he spent on purchasing a stock assuming he bought the stock at the market price used in the calculation.
These were the highest dividend yield stocks on the NSE based on announced dividends in 2021. Delving deeper into their performance we highlighted some other financial ratios.