The Silent Stocks of the Nigerian Exchange

For many investors in Nigeria’s stock market, the promise of a steady income from dividends is one of the key reasons to buy and hold shares. Dividends represent a portion of a company’s profits shared with its shareholders, and they serve as a clear signal of financial health and a company’s commitment to rewarding its investors. But for a growing number of listed firms on the Nigerian Exchange Limited (NGX), that promise has remained unfulfilled for years.

According to a recent analysis by Nairametrics, 45 companies out of the 146 currently listed on the NGX have not paid dividends in at least five years. This means that roughly one in every three listed firms has failed to offer shareholders any cash returns during this period. For investors who rely on dividend income, that is a concerning trend.

These dividend-dry stocks span various industries, from consumer goods and insurance to healthcare, ICT, and industrial manufacturing. For some investors, the situation has left their capital locked in what many now refer to as “dead money”—investments that show little to no return despite being part of a publicly traded market.

In the Consumer Goods sector, several notable names have gone quiet. These include DN Tyre & Rubber, Golden Guinea Breweries, Multi-Trex Integrated Foods, Union Dicon, Nigerian Enamelware, and International Breweries. Each of these companies has refrained from issuing dividends for at least half a decade, frustrating investors who once saw them as solid dividend payers.

The Insurance sector has also contributed heavily to this list. Royal Exchange, African Alliance Insurance, Regency Assurance, Staco Insurance, and Universal Insurance have all failed to pay dividends in the last five years. The absence of returns in this sector is particularly troubling, given that insurance firms traditionally generate steady revenues over time.

In the niche category of Microfinance and Other Financial Institutions, Aso Savings and Loans and Deap Capital Management & Trust are two companies that have similarly not rewarded shareholders in years. Meanwhile, Secure Electronics—previously known as National Sports Lottery—has not paid a dividend since as far back as 2008.

The story is no different in Healthcare. Companies like Ekocorp, Morison Industries, and Pharma-Deko have all failed to deliver any shareholder returns during this period. Similarly, ICT firms such as Omatek Ventures, NCR Nigeria, Chams Holding Company, and e-Tranzact International have also withheld dividends for years, even as technology has become one of the world’s most dynamic sectors.

In the Industrial Goods segment, Premier Paints, Austin Laz & Company, and Greif Nigeria have not paid dividends, and Thomas Wyatt Nigeria from the Natural Resources sector has not issued any since 2007.

The big question for many investors is: why?

According to John Udoh, a broker at Arthur Steven Asset Management, there are valid reasons to worry. “No one will be happy to have an investment that does not yield dividends. Companies that do not pay are not encouraging their shareholders,” Udoh said in a comment to Nairametrics.

In fairness, not all dividend droughts are signs of financial distress. Some companies, especially those in a growth phase, prefer to reinvest their earnings into expansion, new product development, or acquisitions. These firms prioritize long-term value creation over immediate payouts. But for many of the companies listed in the report, a look into their financial statements paints a more troubling picture.

Most of these firms have posted consistent losses or only marginal profits over the past five years. Even among those that have recorded profits, the earnings have been too inconsistent or too low to justify dividend declarations. This financial instability has effectively blocked any meaningful shareholder rewards.

Yet, interestingly, some of these “silent stocks” have seen surprising share price rallies in recent months. Companies such as Ellah Lakes, FTN Cocoa, Chellarams, SCOA, Royal Exchange, International Breweries, NCR, International Energy Insurance, Omatek, and Nigerian Enamelware Plc have all recorded triple-digit gains so far this year.

This has created a disconnect between share price performance and actual shareholder value. Ellah Lakes, for example, has reported losses year after year, yet its stock price continues to rise. FTN Cocoa, another high-rising stock, has suffered repeated losses, including a ten billion naira loss in 2023 and over nine billion in 2024. Even with a notable improvement in the first half of 2025, where losses narrowed to 1.1 billion naira, the company is still far from a position where dividends can be expected.

International Breweries tells a similar story. After reporting a staggering 113 billion naira loss in 2023, the company posted a smaller loss in 2024 and then bounced back with a 29.4 billion naira profit in the first half of 2025. While this marks a potential turnaround, investors are still waiting to see whether this will translate into dividends.

John Holt Plc is another example of inconsistency. The company managed to post profits in 2022 and 2024 but still chose not to declare any dividends. By early 2024, it had fallen back into losses, leaving shareholders with no returns and little certainty.

SCOA, despite turning a profit in three out of the last five years and showing a promising profit of 342 million naira in the first half of 2025, has also failed to reward shareholders with cash payouts. Surprisingly, the stock has gained over 160 percent this year alone.

There are even companies like Daar Communications, which has never paid dividends since its listing in 2008, and others like Royal Exchange Insurance, Staco, Morison Industries, and Omatek, which last issued dividends over a decade ago. For investors holding these stocks, the wait has been painfully long.

Analysts say this dividend drought raises serious questions about the long-term value of investing in these firms. While a rising share price might provide some short-term gains, true value comes from consistent profitability and a willingness to return a portion of those earnings to shareholders.

For investors on the Nigerian Exchange, the message is becoming clearer. Price appreciation without profitability or dividends may create excitement, but it often lacks the sustainability needed to build lasting wealth. Until more listed companies commit to financial discipline, profitability, and fair shareholder treatment, many investors will remain caught between hope and disappointment.