The Dividend Drought: Why Some Nigerian Stocks Shine Without Paying Shareholders

The Dividend Drought: Why Some Nigerian Stocks Shine Without Paying Shareholders

In the stock market, dividends are like rain in farming season — they nourish investors with steady income and reassure them that the soil is fertile. Each payout is a signal: this company is strong enough to share its harvest.

But what happens when the rains don’t fall?

Across Nigeria’s stock market, more than 40 companies have gone silent — some for years. No dividends. No cash rewards. Just a long wait that tests the patience of even the most loyal shareholders.

The Silent Parade of Non-Payers

From consumer goods to ICT, insurance to industrial goods, the list of companies that haven’t paid dividends in five years reads like a who’s who of Nigeria’s corporate landscape:

Consumer Goods: DN Tyre, Golden Guinea, Multi-Trex, Union Dicon, Nigerian Enamelware, International Breweries.

Insurance: Royal Exchange, African Alliance, Regency, Staco, Universal Insurance.

ICT: Omatek, NCR Nigeria, Chams Holding, e-Tranzact.

Healthcare: Ekocorp, Morison, Pharma-Deko.

And the list goes on…

Some, like Secure Electronics, have never paid dividends since 2008. Others, such as Thomas Wyatt Nigeria, have stayed dry since 2007.

Why It Matters

John Udoh, a Lagos-based broker, put it bluntly:

> “No one will be happy to have an investment that does not yield dividends. Companies that do not pay are not encouraging their shareholders.”

The truth is harsh but simple. For many of these firms, losses have been the norm, not the exception. Without consistent profits, dividends are impossible.

The Strange Case of Rising “Silent Stocks”

Here’s where the story twists. Despite the drought, some of these non-dividend-paying stocks are rallying hard in 2025:

Ellah Lakes — no profits, no dividends, yet triple-digit share gains.

FTN Cocoa — five years of losses, still up after narrowing its H1 2025 deficit.

International Breweries — N113 billion loss in 2023, now boasting N29.4 billion profit in H1 2025. Investors whisper: “Could this be the comeback?”

SCOA — withholding dividends, yet its stock is up 167% this year.

It’s a curious paradox: price rallies without rewards. The market, it seems, sometimes chases hope more than reality.

Lessons for Investors

This is the heart of the story. Price appreciation without profitability is like building castles on sand.

Dividends signal real strength — proof of cash flow, not just headlines.

Companies that rally without payouts may deliver short-term thrills but leave long-term investors thirsty.

Until more Nigerian firms commit to consistent profits and payouts, the dividend drought will remain one of the NGX’s biggest challenges.

Final Take

Dividends are more than numbers — they are trust. They are management’s way of saying: “Thank you for believing in us.”

And while some companies chase headlines with rising share prices, the wisest investors know this: a stock without dividends is often a promise unkept.

Because in the long run, rains may bring green leaves — but it’s the fruits that feed the farmer.