by DSRNews DSRNews

Investors in consumer goods firms shouldn’t fret as the companies are set to maintain dividend payment momentum even as tough and unpredictable environment undermined profit while share prices were beaten down last year.  Eight largest consumer good firms quoted on the floor of the bourse paid N78.33 billion for the year financial year ended December 2017. Analysts are of the view that payout ratio will not reduce even though some have embarked on aggressive expansion plans with a view to increasing the share of the market. Dangote Sugar Refinery paid total dividend of N15 billion for 2017 financial year. Dwindling purchasing power among consumers, insecurity in the northern part of the country, decrepit infrastructure, high incidence of smuggling, counterfeiting locally manufactured products, and the menacing gridlock at the Apapa Ports have made it difficult for manufacturers to bolster margins.  NASCON Allied and Dangote Sugar’s dividend yields of 8.33 per cent and 12 per cent are the highest among peers.  This is because their stocks are trading below intrinsic value, which makes it very attractive to investors. NASCON and Dangote Sugar are trading at a price to earnings ratio of 9.39 times and 5.83 times, which is lower than the consumer goods index P/E ratio of 19.58 times. BUSINESSDAY PAGE 31,  MONDAY, JANUARY 7, 2019