Investors hit as one-third of NGX firms skip dividends for five years

A fresh market analysis has revealed that roughly one in three companies listed on the Nigerian Exchange Limited (NGX) have not rewarded shareholders with dividends for at least five years, highlighting what analysts now describe as a deepening “dividend drought” on the bourse.

Out of 146 quoted firms reviewed, 45 have withheld dividend payouts, leaving income-focused investors increasingly frustrated.

Dividends—typically distributed from current profits or retained earnings—remain one of the few direct ways shareholders earn regular returns on their investments.

Their prolonged absence, experts say, signals either persistent unprofitability or management’s preference to reinvest earnings at the expense of shareholder income.

Companies in the Dividend Desert

The list of non-dividend-paying companies cuts across multiple sectors: Consumer Goods: DN Tyre & Rubber, Golden Guinea Breweries, Multi-Trex Integrated Foods, Union Dicon, Nigerian Enamelware, International Breweries.

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

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

Healthcare: Ekocorp, Morison Industries, Pharma-Deko.

Industrial Goods: Premier Paints, Austin Laz & Company, Greif Nigeria Plc.

Financials: Aso Savings & Loans, Deap Capital Management & Trust.

Others: Secure Electronics (formerly National Sports Lottery), Thomas Wyatt Nigeria (no dividends since 2007), Daar Communications (none since listing in 2008).

Some of these firms—among them Royal Exchange, Staco Insurance, Morison Industries, and Omatek—have gone more than a decade without rewarding shareholders.

Profitability Without Payouts

A review of company filings shows that many of these firms have been weighed down by consistent losses, explaining their inability to pay. However, even those that occasionally report profits—such as John Holt, SCOA, and International Breweries—have withheld dividends, citing earnings volatility.

International Breweries, for example, posted a staggering N113 billion loss in 2023 but rebounded with a N29.4 billion profit in the first half of 2025. Investors are now closely watching whether this turnaround will translate into dividends.

FTN Cocoa has accumulated heavy losses (N10.65 billion in 2023 and N9.53 billion in 2024) but narrowed its deficit to N1.1 billion in the first half of 2025. Still, analysts believe dividends remain unlikely until the company achieves consistent profitability.

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Similarly, SCOA has recorded profits in three of the past five years—including N342 million in H1 2025—yet has refrained from payouts despite its stock soaring 167 percent year-to-date.

Analysts Sound the Alarm

Market operators warn that prolonged silence on dividends could damage long-term investor confidence.

“No one will be happy to have an investment that does not yield dividends,” said John Udoh, a broker at Arthur Steven Asset Management. “Companies that do not pay are not encouraging their shareholders. Investors must study these companies closely to understand whether the silence is due to reinvestment strategies or chronic unprofitability.”

Amina Yusuf, a capital market analyst, added: “Price rallies without dividends or sustainable profitability are hollow victories. Investors may see temporary gains, but without payouts, shareholder value is questionable. For the NGX to deepen investor confidence, consistent dividend policies are critical.”

Interestingly, some of these “silent stocks” have defied their weak fundamentals by outperforming the market in 2025. Ellah Lakes, FTN Cocoa, Chellarams, Royal Exchange, and International Breweries have all recorded triple-digit year-to-date gains, despite most being loss-making and dividend-shy.

Analysts say this disconnect underscores a deeper structural issue: speculative trading and short-term sentiment are fueling price rallies, while sustainable long-term returns through dividends remain elusive.

With nearly one-third of NGX-listed firms failing to deliver payouts, experts warn that Nigeria’s capital market risks alienating long-term investors if dividend droughts persist unchecked.