As the year comes to a close, it’s worth taking a look at some of the top dividend-paying stocks owned by African billionaires that individual investors can consider adding to their portfolios.
Investing in dividend-paying stocks can be a great way to generate passive income, and African billionaires are no exception when it comes to owning shares in companies that pay dividends.
Some of these companies have seen significant increases in their market value and have delivered impressive financial performances in recent years, making them attractive options for those looking to generate passive income through dividends.
Investors interested in these companies should be aware of the rules and requirements for qualifying for dividends, such as the need to buy shares at least three working days before the dividend qualification date and complete e-dividend registration. It’s also worth noting that some of these companies are listed on foreign exchanges and may require investors to open accounts with foreign brokers in order to acquire their shares.
1. Richemont
Founded and partly owned by Johann Rupert, Swiss luxury goods holding company Richemont ranks as one of the top dividend-paying stocks owned by African billionaires.
Richemont, the owner of brands such as Cartier, Bodino, and Jaeger-LeCoultre is one of the few companies owned by an African businessman but listed in Europe.
In its 2022 fiscal year, the company saw a profit increase of 61 percent, from €1.289 billion ($1.36 billion) in 2021 to €2.08 billion ($2.2 billion). As a result, it paid shareholders an ordinary dividend of CHF2.25 ($2.31) per “A” share and CHF0.225 ($0.2363) per “B” share, plus a special dividend of CHF1.00 ($1.0277) per “A” share and 10 “B” shares.
With its profit for the first half of the 2022 fiscal year rising by more than 40 percent, from €1.5 billion ($1.55 billion) in the same period in 2022 to €2.1 billion ($2.17 billion), investors are expecting Richemont to offer a higher dividend pay-out in 2023.
Currently, Richemont’s shares are down 7.4 percent year to date, and with earnings up by double-digits, the shares, which are trading at R220.34 ($12.71) per share, are relatively cheaper than they were a year ago.
2. OCI N.V.
Founded and partly owned by Nassef Sawiris, OCI N.V. is a leading global manufacturer and distributor of nitrogen and methanol products. The company’s strong performance in 2022, with shares increasing more than 46 percent since the start of the year, has made it a hot topic.
The boost in its share price can be attributed to the company’s financial success, which saw a turnaround from a loss of $213.4 million in 2020 to a profit of $731.8 million in 2021, thanks to a significant increase in revenue from $3.47 billion to $6.32 billion.
OCI N.V. accomplished numerous commercial, operational, organizational, and strategic milestones in 2021, resulting in a record year for the company and the first dividend of $350 million to shareholders.
As a result of this performance, the company approved a new dividend and capital allocation policy that combines a consistent base return of capital of $400 million per year, subject to its leverage targets and policy.
The company plans to distribute a semi-annual cash return of $730 million to shareholders, including a $200 million base, with respect to the second half of its 2022 fiscal year, payable in April 2023.
3. BUA Cement
Founded and majority owned by Abdul Samad Rabiu, BUA Cement is Nigeria’s second-largest cement producer, operating with a combined installed capacity of 8 million metric tonnes per year. The company, which is 92.2 percent owned by Rabiu, has been one of the best-performing stocks on the Nigerian Exchange in recent times.
In 2022, it paid a dividend of N2.6 ($0.0063) per share to shareholders, up from the N2.067 ($0.0050) dividend paid the previous year. It is expected to reward shareholders with an even higher dividend payout in 2023, offering opportunities for both existing and new investors to increase their earnings from the company.
BUA Cement’s profit figures for the first nine months of 2022 increased by 12.3 percent, from N65.9 billion ($145 million) during the same period in 2021 to N74 billion ($168.4 million), due to double-digit increases in cement sales.
Its ability to maintain a double-digit increase in earnings and revenue, despite challenges in the operating environment, particularly rising energy prices, can be attributed to recent investments in capacity, positioning the company as a leader in Africa’s cement industry.
4. African Rainbow Minerals (ARM)
Founded and partly owned by Patrice Motsepe, African Rainbow Minerals (ARM) is a South African mining and minerals company that consistently pays impressive dividends to its shareholders.
Despite a seven-percent drop in profit at the end of its 2022 fiscal year, from R15.47 billion ($895 million) in 2021 to R14.36 billion ($830.5 million), the company paid its shareholders a final dividend of R20 ($1.158) per share, the same amount as the previous year.
This led Motsepe, who owns a 39.7-percent stake in the company, to receive R1.78 billion ($103 million) in final dividends from his stake in ARM, just four months after earning $69.6 million in interim payments.
5. Dangote Cement
Founded and majority owned by Aliko Dangote, Dangote Cement is Africa’s largest cement manufacturer and one of the few companies owned by African billionaires with a long history of dividend payouts. The company operates with a total production capacity of 51.55 million tonnes of cement per year across 10 countries.
In 2021, Dangote Cement reported a 33-percent increase in profit, from N276.06 billion ($663.5 million) in 2020 to N364.4 billion ($875.9 million), due to strong top-line growth and effective cost-cutting strategies.
As a result, the company rewarded its shareholders with a final dividend distribution of N340.81 billion ($819.2 million) in 2022. Dangote, who owns an 86-percent stake in the company, received a dividend of $725.2 million, which represents the majority of the payout.
Investors expect Dangote Cement to reduce its dividend in 2023 due to a significant decline in earnings in the first nine months of 2022.
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