In an era where some companies are recording below expectation performance and others are issuing profit warnings, FIDELITY BANK PLC seems to have come off 2015 unfettered by the many factors that have bedeviled companies of its kind. In what looked like déjà vu, the bank recorded net profit of N13,904 million, up by 0.78% from the N13,796 million made in 2014 amounting to earnings per share of N48, exactly like the previous year.
The board of directors of the bank therefore recommended a 16 kobo per share dividend, representing payout ratio of 0.33% and dividend yield of 12,12% when measured against the 30th March price. This recommended dividend is slightly less than the 18 kobo per share dividend proposed and paid last year.
Though the dividend growth rate is in the negative of 11.11%, the low payout rate may be preferable to growth investors to the distaste of dividend or income investors. There have been many arguments for and against low payout as a corporate dividend policy, it is hoped that if the bank utilizes its retained earnings for profitable activities, the stock market will reward it accordingly.
The bank’s stock has however not done too well so far this year, having lost 12% (YTD) of its beginning of year value to close at N1.32 on March 30th although it gained 20% in March, going from N1.10 on February 29th to N1.32 on March 30th. There is an indication that this up trend will persist for some time. Click to see Audited Financial Report