Nigeria’s market has plenty of opportunities for investors seeking stable income + growth through dividends. The key is to pick companies with consistent payouts, strong cash flows, and room to increase dividends over time. Below are several NGX‑listed stocks worth keeping an eye on, based on recent dividend yield, payout behavior, and growth potential.
📋 Nigerian Watchlist: Dividend Growth & High Yield Stocks
| Company | Sector / Industry | What Makes It Attractive | What to Watch (Risks / Considerations) |
|---|---|---|---|
| GTCO Holdings (GTCO) | Banking / Financial Services | Offers one of the highest dividend yields in 2025 (~11–12 %). Recent large increase in payout (from ~N3.70 to ~N8.03 per share) showing strong earnings growth. Businessday NG+2TheTimes.com.ng+2 | Banking sector risk (non‑performing loans, regulation), FX and macro uncertainties. Dividend sustainability if profits drop. |
| Fidelity Bank Plc | Banking | Also high yield (~10.5–11 %) with increasing dividends. Good candidate for those seeking both income and potential growth. Businessday NG+1 | Sector exposure to credit risk, economic slowdowns. Variable expenses, regulatory risks. |
| Zenith Bank Plc | Banking | Strong track record, attractive yields. Seen as one of the more stable large banks with capacity to deliver dividends. Money Boom+2Businessday NG+2 | Same banking sector risks, also possible pressure from inflation, interest rates, currency depreciation. |
| Dangote Cement Plc | Manufacturing / Cement | Huge cash flows, large payouts to shareholders. In H1 2025 it paid more cash dividends than almost all companies on NGX. Strong brand / dominance in sector. Business Elites Africa+2Nairametrics+2 | Cement sector sensitive to input costs (energy, fuel, raw materials), logistical challenges. Also, the relatively low growth in share price sometimes makes total return more dependent on dividend. |
| BUA Cement | Cement / Construction Materials | Has also been increasing payouts, high payout ratio indicating willingness to share profits with shareholders. Nairametrics+2Nairametrics+2 | As with Dangote, costs and market competition matter. High payout ratio could reduce buffer during weak profit years. |
| SFS REIT | Real Estate Investment Trust | High dividend yield (double digits in some reports). Real estate income can be more stable with suitable properties and good management. Prestmit+1 | REITs depend heavily on occupancy, property maintenance, macroeconomic stability. Also affected by interest rates and real estate cycles. |
| Smart Products Plc | Real Estate / Construction | Extremely high yield in past years (e.g., ~40 % in 2023) making it attractive for income‑seekers. Prestmit | But very small size, possibly less liquidity. Regulatory, operational risk higher. Dividend yield could be volatile. Such high yields often come with higher risk. |
| Presco Plc | Agriculture / Oil Palm | Has consistently paid dividends over several years. Good for investors who want exposure outside banking / cement. Money Boom | Agricultural business is sensitive to weather, commodity prices, regulatory & environmental risks. Yield is lower than banks or cement in many cases. |
🔍 What to Look for When Choosing Dividend‑Growth Stocks (Nigeria)
To separate the “good” from the “risky”, consider:
- Consistency of dividend payments over time – companies that pay regularly (interim & final) for several years.
- Dividend growth history – not just yield, but whether the company has increased dividends over time. Avoid companies that paid a high yield once but have flat or declining payouts.
- Payout ratio – how much of earnings are being paid out. If too high, there might be little left for investment or cushioning during tougher economic times.
- Free cash flow & earnings stability – ensuring that earnings are not just paper profits but backed by cash flow.
- Sector risks & macroeconomic factors – such as inflation, foreign exchange, regulation, interest rates.
- Liquidity & trading volume – you should be able to buy/sell without excessive slippage.
💡 Example Portfolio Strategy Using This Watchlist
Here’s how one might build a modest income‑oriented NGX portfolio using the names above:
- Core income banks: GTCO, Zenith, Fidelity – for relatively stable dividends.
- Industrial / manufacturing exposure: Dangote Cement, BUA Cement – for higher yields and balance vs banking exposure.
- Alternative income sources: SFS REIT, Smart Products – to diversify sector risk.
- Growth & stability combo: Mix of Presco or others in agriculture to add non‑cyclical exposure.
Aim to rebalance annually. If one stock grows its dividend strongly and price rises, it may become too large a share; trimming and shifting to under‑represented names keeps balance.
⚠️ Caveats & Risks
- Nigeria’s macro environment can be volatile: inflation, currency devaluations, policy shifts, energy costs, foreign exchange risks are real threats.
- Some high yields come with high payout ratios or weak underlying growth; the dividend could be cut if earnings or cash flows decline.
- High yield often attracts investors, but yield alone isn’t enough — dividend growth is important for sustaining income in real terms, especially with inflation.
- Liquidity is often lower in non‑major stocks or smaller companies, which can make exit harder if things go south.
✅ Final Thoughts
If you’re focused on building income + growing that income over time, the NGX offers several stocks worth watching. The ones above combine relatively strong yields with growth potential. For best results:
- Do your own homework: read financial reports, check recent earnings and cash flow.
- Diversify across sectors.
- Be patient — dividend growth takes time.
