7 Stocks that Pay Dividends on the Ghana Stocks Exchange
Did you know there is a way to end recuring income by owning shares of big companies on the Ghana stock exchange without doing any work I mean this is a great side hustle called dividend invested in today's blog we are diving into the Ghana stock exchange to explore the top seven dividend stocks that have consistently rewarded investors over the time whether you are looking for a passive income or long-term wealth creation these companies offer stability growth potential an attractive payout in this blog I'm going to show you how to
select stocks like a pro how to calculate your dividends and also how to consider your risk so that you don't make mistakes so first we will talk about dividend stocks and why companies pay dividends and also look at why you need to invest in these dividend stocks make sure not to skip these steps trust me these steps that I'm about to show you are very very important to know before we jump into the stock list watch this blog to the end to get all the juicy part so you don't miss out before we dive into the list let's quickly
cover what Dividends are dividend are payments that companies make to their shareholders usually in the form of cash think of it as a thank you gift from the company for owning their stocks these payments come from the company's profit and they are typically distributed quarterly though some companies pay vs Money monthly or annually so why do some companies choose to reward their investors this way let's dive into it there are two main types of dividends we have the cash dividends and the stock dividends cash Dividends are paid in
actual money to the shareholders I mean either to your bank account or into your mobile money stock dividends on the other hand are additional shares given to the investors instead of paying you in cash the type of dividend a company offers depends on its Financial strategy and long-term goals there are several reasons why companies decide to pay dividends the first one is by rewarding shareholders when a company earns a profit it can either reinvest the money back into the business or share it with the investors by paying dividends
companies give shareholders a piece of the P which makes owning their stock more appealing to investors the second reason why companies pay dividends to their investors is signaling Financial we you know paying dividends also sent a message to the markets that oh we are really doing well I mean companies that consistently pay dividends often signal that they have stable earnings and are confident about their future this can actually attract more investors and boost the stock price the third one can also be attracting institutional
investors big institutions like pension funds and mutual funds love dividend paying stocks because they provide regular income these institutions often manage money for retirees or other people who rely on steady payouts so they prefer stocks that deliver consistent dividends let's talk about how you can pick the right dividend paying stocks on the Ghana stock exchange not all Dividends are created equal and there are some important factors to consider before investing the first thing to check here is the dividend yield this tells you how much
income you will earn relative to the stock price for example if a stock trades at 10 Ghana cedis and pay one Ghana City in annual dividends the yield is 10% but here is the catch a high yield dividends might sound great but it could also be a warning sign if the stock price has fallen sharply the yield might look artifice high if the company isn't enough to sustain those payouts it could cut or eliminate the dividends as a beginner aim for moderate yield between let's say 6 to 15 anything higher might require
extra caution the second one is dividend payout ratio this measures how much a company's earning are being paid out as divided a payout ratio above 100 means the company is paying out more than it ends which is unsustainable in the long run ideally you should be looking out for a payout ratio between 60 to 70 this leaves room for the company to reinvest in growth pay off debts and handle unexpected challenges the next is dividend growth don't just focus on the current dividends look at whether the company has a history of gr its
dividends consistent dividends good is a good sign that the company is healthy and committed to rewarding shareholders you also have to consider Financial wealth you have to make sure the company is financially healthy check the debts levels and the cash flows a company draing in debt or struggling to generate cash won't be able to maintain dividends for long look at the companies with manageable debt and strong free cash flow free cash flow is the money that that is left over after the company covers its operating cost and capital
expenditures that is what funds the dividends note that dividends aren guaranteed companies can decide to cut off or suspend payouts if the they face financial difficulties that is why it is crucial to choose companies with strong track records and stable aits why should you consider investing in dividend paying stocks here are three compelling reasons you need to look out for the first one is passive income dividends provide a steady stream of cash flow which can supplement your salary or retirement income number two is compound
growth reinvesting dividend allows you to buy more shares accelerating Your World building potential number three lower volatility dividend paying stocks tend to be more established and less volatile than growth Focus stocks make them cfer beds for conservative investors now let's look at the seven dividend paying stocks on the Ghana stock exchange and how much they pay their investors first on our list is MTN Ghana one of the most dominant stocks on the Ghana stock exchange as a telecommunication giant MTN ears massive
revenue from cause Beta And even mobile Money Services in 2024 Mt paid an average annual dividend yield of around 9% meaning if you had 10,000 shares you would have received about 2,400 Ghana cedis as dividends MTN payout ratio is around 65% this means that MTN Ghana pays out 65% of its net profit as dividend while keeping the rest for expansion and operations if MTN made a net profit of 1 billion Ghana cedis then 650 million Ghana cedis will be distributed to the aers NTM Ghana's performance for the past one year is
around 96% and 10% year to date meaning if you invested 100,000 in February 2024 you will be worth 96,000 Ghanaian cedis right now that's impressive isn't it with continuous growth in Mobile Money Services and data consumptions MTN remains a solid dividend paying stock the company has also shown resilience against economic downt making it a reliable choice for long-term investors the next on the list is Standard chattered Bank GH this bank has been in operations for over a century it's a global banking Powerhouse with tip roots
in Ghana SCB consistently pays dividends and it's has an average dividend yield of around 12% this means that if you owned 10,000 shares of C SB and the paid dividends of 2 GH C 90 P per share you would receive 29,000 GH cedis as passive income that is impressive their payout ratio is around 43% this means standard chter distributes 43% of its net income to shareholders if they make 1 billion Ghanaian cedis in net profits 430 million Ghanaian cedis will go to divident the performance over the past one year is around 30 1% meaning if you
invested 100,000 Ghanaian cedis in February last year you'll be worth 131 Ghanaian cedis that's still beat inflation banking stocks are cycle but also resilient they drive during economic recoveries and remain essential even in down times ensuring consistent payouts to their shareholders let's look at the third stock on the list which is total enies marketing GAA total is another top dividend stock operating in the oil and gas sector with consistent demand for fuil and lubricants company generates steady profits in 2024 total
Ghana had an average dividend yield of about 10% that means that if he invested 100,000 Ghanaian cedis you would have earned around 9 to 10,000 Ghanaian cedis in dividends one of the highest dividend paying stock on the market the payout ratio for total energies Ghana is around 65% which means that they pay 65% to their shareholders as dividend even though oil prices fluctuate globally local Distributors like total Ghana passes their cost onto consumers shiing themselves from the volatility total's performance for the past one year is
around 41% meaning if you invested 100 Ghanaian cedis in February 2024 you would be wor 141,000 Ghanaian cedis now let's shift our GS to the insurance in industry which is number four on the list and number four is sic Insurance one of Ghana's oldest and most trusted insurers sic provides life non-life and reinsurance products catering to individuals and businesses alike sic is one of the dividend paying companies that has high dividend yield sic's average dividend yield is now around 18% representing 5 P per share at the price
of 20 7 PES with growing demand for insurance products like sic disposition for a long-term growth however insurance claims and Market competition p a risk although sic's dividends may not match those of larger corporations they still provide value imagine owning 37,3 70 shares at only 100,000 Ghanaian cedis just multiply that by five pwks that is around 18, 518 dividend payments I think that looks awesome sic's payout ratio is around 74% and the one year performance is at 12.
5 as at the time of recording this blog let's move on to the FED dividend stock on the Ghana stock Exit B oil palm Plantation Bob is a leader in palm oil production in Ghana here bz o pays a dividend of around two Ghana cedis 20 P pay share with high dividend yield of about 88.
8% which is very good even though the company's market cap is just 879 million Ghanaian cedis it was still able to turn 17.3 in one year the company benefits from strong demand for palm oil but is also vulnerable to fluctuating commodity prices and weather conditions agricultural stocks tie directly to commodity prices so understanding Supply demand Dynamics helps anticipate future payouts Bob has a payout ratio of around 100% which makes it one of the exceptional dividend paying stocks on the Ghana stock a shet meaning that they share 100% of their profit with their
shareholders another Pell option in the ranking space is Ghana commercial B which is number six on the list in 2023 GCB declared a dividend of 50 PES per share yielding around 7% the bank strong balance sheet makes it attractive but economic downtimes and Rising loan default remain a risk the payout ratio for GCB seems to be zero since they weren't able to pay out their dividend to their shareholders in 2024 however gcb's one-year performance has an outstanding year performance of around 89.1% increase with a market cap of 1.7
billion Ghanaian cedis which makes it a great stock to add to your portfolio last but certainly not the least is UN Dan a household new known for iconic Brands like pepsodent lipon and blueband marging un manufactures and distributes consumer goods across West Africa un's average dividend yield is around 2.
1% representing 40 P per share at the price of 9 .50 which looks smaller but it's it's good the payout ratio of Ina is 19% which looks very low however Ina saw a high growth rate of over 100% in 2024 with a market cap of 1.2 billion Ghanaian cedis now wait wait wait before you rush to buy these stocks you need to consider this risk factors number one know that prices can drop meaning that your invest M value decreases number two is to consider dividends you know Dividends are not guaranteed companies can cut off or stop paying dividends if they face financial difficulties number
three is inflation risk if dividends go slower than inflation your real return might be lower over time number four is Market risk you know fluctuations in overall economy can also impact a company's profits and their dividend payouts so let's look at how to calculate dividends in case you want to invest in a dividend paying stock so to calculate for your total dividends that you earn you need to multiply your dividend per share by the number of shares that you own for example if a company pays two Ghanaian cedis per
share and you own 10,000 you will receive 20,000 Dian cedis in total dividend this can be reinvested to buy more stocks and grow your wealth over time so dividend stocks are great way to passive income while you invest in the stock market if you are new to investing consider starting small reinvest your dividends and diversify your portfolio do your own reset before buying any stock and always think longterm if you're serious about building your wealth then check out my beginner guide to how to invest in a Ghana stock
exchange Link in the description below or you can register my online course which teaches you how to invest in the US stocks and the Ghanaian stocks and how to grow your wealth in the long term which of these dividend stocks are you much interested in let me know in the comment section below and don't forget to like subscribe and turn on your notification Bell for more insightful Finance content like this see you in my next blog