This article will discuss the highest dividend-paying stocks in South Africa. But first, a definition of dividend will be provided along with a brief explanation of dividends before eventually discussing the subject matter as to which is the highest dividend-paying stocks in South Africa.
What are dividends?
A dividend according to Investopedia, is the distribution of a portion of a company’s profits to a group of shareholders, as determined by the company’s board of directors. Common stockholders of dividend-paying companies are usually eligible as long as they hold shares before the dividend payment date. Dividends can be paid in cash or additional shares.
Dividends must be approved by shareholders through their voting rights. Although cash dividends are the most common, they can also be issued in the form of shares or other assets. Apart from companies, various mutual funds and exchange-traded funds (ETFs) also pay dividends.
A stock dividend, on the other hand, is simply a dividend payment to shareholders in the form of shares as opposed to cash. Stock dividends have the benefit of rewarding shareholders without draining the company’s cash position, although they can weaken earnings per share.
Now that a definition of dividend has been given and a brief explanation of the same has been done, here are the highest dividend-paying stocks in South Africa according to the Johannesburg Stock Exchange (JSE).
Absa Group
Earnings Per Share: R730.90
Return on Equity: R5.08
Estimated Dividend Yield: 8.92
The ABSA Group holds majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania, Uganda, and Zambia, and insurance companies in Botswana, Kenya, Mozambique, South Africa, and Zambia. They also have offices in Namibia, Nigeria, and investment firms in the UK and the US.
Exxaro Resources
Earnings Per Share: R2,955.00
Return on Equity: 18.78
Estimated Dividend Yield: 18.78
Exxaro Resources
In 2006, in the month of November to be specific, Kumba Resources Limited separated paving the way for Kumba Coal and other assets to merge with Eyesizwe Coal to form what is now known as Exxaro Resources Limited. Since then, Exxaro has grown to become one of the largest diversified mining companies in South Africa.
Exxaro has a huge portfolio of assets that includes coal operations and investments in iron ore, residual pigment production, and renewable energy. The organization boasts of ensuring the improvement of people’s lives it the premises and has committed itself to make a positive change in the global sphere at the core of its existence. Over the 10 years, Exxaro has made huge strides in its quest to become a superpower and its efforts have not gone unnoticed as even its peers are able to recognize and respect it for its innovation, ethics, and integrity, and is widely acknowledged as a leader in the FTSE Russell ESG.
Liberty Holdings
Earnings Per Share: R -582.90
Return on Equity: -7.68
Estimated Dividend Yield: 8.21
Liberty was founded in 1957 by Sir Donald Gordon whose inspiration for establishing the company came from seeing his father who worked so hard in his but yet received a small financial reward for his efforts. His father’s struggle inspired him to believe that everyone should have the opportunity to increase their wealth and leave their families with proud legacies and it is from that belief the name was taken from America’s Statue of Liberty to infer freedom and opportunity
Kumba Iron Ore
Earnings Per Share: R7,107.00
Return on Equity: 48.01
Dividend Cover: 1.46
Kumba was incorporated in South Africa on 16 May 2005 and commenced trading in November 2006 following the unbundling of Kumba from Exxaro Resources Limited previously known as Kumba Resources Limited. Subsequent to unbundling, Kumba was listed on the JSE Limited (JSE) on 20 November 2006.
MTN Group
Earnings Per Share: R749.00
Return on Equity: 16.55
MTN was registered in South Africa in November 1994. It is engaged in the telecommunications industry through its affiliates, joint ventures, and acquaintances. The company’s shares are listed on the JSE under the name JSE: MTN in the mobile telecommunications sector.
Old Mutual Limited
Earnings Per Share: R116.10
Return on Equity: -7.61
Dividend Cover: 4.15
Old Mutual Limited is one of Africa’s giants when it comes to premium financial services that are listed on the Johannesburg Stock Exchange (JSE). It also has a standard listing on the London Stock Exchange as well as a secondary listing on the Malawi, Namibia, and Zimbabwe Stock Exchanges. The company’s registration and incorporation are in the Republic of South Africa.
Africa Rainbow Capital Investment
Earnings Per Share: R12.00
Return on Equity: 1.23
This is a public company incorporated in the Republic of Mauritius. It holds a Category 1 Global Business License under the Mauritian Financial Services Act of 2007. It is regulated by the Mauritian Financial Services Commission and the company is listed on the Johannesburg Stock Exchange Limited.
African Rainbow Capital is new on the dividend stock scene. It is making substantial efforts to be one of the most promising entrants listed on the Johannesburg Stock Exchange.
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