With the half-year period ending on Monday (today), one of the key indicators for share price growth the market will be looking out for in the short term is stocks with a reputation for paying dividends at least twice a year.
On that score, the focus of big market players like institutional investors, including pension funds and portfolio managers, is set to shift to such stocks as the cash reward that companies will pay for the period are largely likely to shape how they allocate assets in the weeks ahead.
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“Investors might start positioning for Q2-earning season, favoring corporates with FX gains, cost control, clear growth trajectory, and those with potentials for quality interim dividend payment,” investment bank United Capital said in its investment outlook for this week.
“We expect retail investors to continue to take profit from the previous week’s gains, tactically slowing the upward movement of the equities market. We advise investors to cherry pick fundamentally sound stocks with potential for interim dividend payment,” they added.
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A couple of undervalued stocks are still up for grabs, even though the market has been mostly bullish in recent times. Value investors may want to give that thought in deciding what stocks to buy.
PREMIUM TIMES has assembled some stocks with sound fundamentals, adopting rigorous approaches to save you the risk of picking equities at random for investment.
The pick, a product of an analytical market watch, offers a guide to entering the market and taking strategic positions in hopes that selected stocks will record reasonable price appreciation with the passage of time.
This is not a buy, sell or hold recommendation but a stock investment guide. You may need to involve your financial advisor before taking investment decisions.
Access Holdings
Access Holdings tops this week’s list for trading significantly below its intrinsic and book value and for its chances of paying a good dividend for half-year 2025 (HY 2025). The price-to-book (PB) ratio of the bank holding company as of the start of last week was 0.3x, while the price-to-earnings (PE) ratio is currently 1.5x. Its dividend yield is 11.3 per cent.
Dangote Cement
Dangote Cement appears on the list for its chances of declaring a good dividend for HY 2025. The corporation’s PB ratio as of the start of last week was 3.2x, while its PE ratio is 12.5x. The dividend yield is 7 per cent.
ALSO READ: Transcorp, NASCON, Presco top stock pick this week
United Bank for Africa (UBA)
UBA appears on the pick for trading below its underlying and book value and for its likelihood of declaring a strong dividend for HY 2025. The PB ratio of the pan-African lender as of the start of last week was 0.3x, while the PE ratio is 1.5x. Its dividend yield is 14.3 per cent.
NPF Microfinance Bank
NPF Microfinance Bank makes the cut for trading below its intrinsic value and for its possibility of declaring a strong dividend for HY 2025. The microlender’s PE ratio as of the beginning of last week was 6.6x. Its dividend yield is 6.7 per cent.
Aradel Holdings
Aradel makes the cut for its prospects of announcing a good dividend for HY 2025. The energy company’s PB ratio as of the start of last week was 1.6x, while the PE ratio is 8.6x. Its dividend yield is 5.9 per cent.
