A dividend is a payment a company makes to its shareholders from its profits. When a company listed on the Nigerian Exchange (NGX) performs well, its board may choose to share a portion of those profits with shareholders in the form of a dividend.
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Definition
A dividend is a portion of a company's profits paid out to registered shareholders, usually on a per-share basis, declared at the discretion of the company's board.
Nigerian companies listed on the NGX declare dividends after their annual or interim results. The board proposes a dividend per share — for example ₦0.50 per share — which shareholders then vote on at the Annual General Meeting (AGM). Once approved, the dividend is binding.
To receive a dividend, you must be a registered shareholder on the record date. The record date is the cut-off point: anyone holding shares on that date receives the dividend. The payment date is when the dividend is actually credited — typically a few weeks after the record date. With Shares Saver, your shares are registered in your name so you are eligible for dividends as a direct shareholder.
Most Nigerian companies pay cash dividends directly to the shareholder's bank account (via the registrar's e-dividend system). Some companies offer scrip dividends — where you receive additional shares instead of cash. The company will specify which type of dividend is being paid.
Dividend income in Nigeria is subject to withholding tax (WHT) at 10%, which is deducted at source before payment reaches you. Shares Saver does not provide tax advice — consult a qualified tax adviser for your specific situation.
Yes, if your shares are registered in your name before the record date, you are entitled to receive any declared dividend. With Shares Saver, shares are registered directly in your name through regulated broker execution.
Nigerian dividends are typically paid via e-dividend directly to your registered bank account. You may need to ensure your bank details are registered with the relevant registrar.
Yes. Dividends are not guaranteed. A company's board decides whether to declare a dividend based on profitability, cash flow, and business strategy. Not all listed companies pay dividends every year.
The Securities and Exchange Commission (SEC) introduced the e-dividend system to ensure dividends are paid directly to shareholders registered bank accounts. If you have not registered your bank details with the relevant registrar, unclaimed dividends may accumulate in your registrar account until you update your records.
Dividend yield is the annual dividend per share expressed as a percentage of the current share price. For example, if a company pays two naira per share annually and the share trades at forty naira, the dividend yield is 5 per cent. Yield changes whenever the share price or the declared dividend amount changes.
A bonus issue gives shareholders additional shares instead of cash. A cash dividend pays money into your registered bank account. A bonus issue increases the number of shares you hold but does not add cash to your account — and because more shares now exist, the per-share price typically adjusts downward to reflect the increased share count.
Important disclaimer
This article is for general information and educational purposes only. It does not constitute financial advice, investment advice, legal advice, or tax advice. The value of investments can fall as well as rise. Seek independent regulated financial advice before making any investment decision. Shares Saver does not provide financial advice.
Shares Saver lets you buy and own NGX-listed shares directly in your own name through regulated broker execution.
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