Dangote Cement pays $2.8 billion in dividends in 5 years

Africa’s leading cement manufacturer, Dangote Cement has recommended a total dividend payout of N272.65 billion from the profits made in 2020.

According to data from Nairalytics, the research arm of Nairametrics, the cement behemoth has now paid a total of about N1.14 trillion in dividends since 2016.

Dangote Cement is majority-owned by Dangote Industries Limited (DIL) with about 85% ownership of the outstanding shares of the company. Africa’s richest man, Aliko Dangote owns nearly all of DIL. Thus, we estimate over 90% of the dividends paid over the last 5 years were paid to the billionaire investor.

Findings by Nairametrics also indicate most of the funds are used to service debt obligations of the group while also used to fund other major projects such as the Dangote Refinery.

Strict Dividend PolicyThe company has maintained a regular dividend of N16 per share in the last three years and a dividend payout ratio that averages 99% over the last 5 years with 2019 being the highest with about 136% in the dividend paid out of profits.

The dividend payout ratio for 2020 was 99% meaning it basically paid out all the profits it earned. Total profits earned since 2016 is about N1.2 trillion thus over the last 5 years it has paid out 95% of all its profits as dividends.

Dangote Cement is currently valued at about N3.8 trillion and boasts of strong retained earnings of N779 billion, despite paying out nearly all its dividends in the last 5 years.

During this period, we estimate the company has paid about N181 billion in taxes. What you should know Dangote Cement’s topline revenue rose from N615.1 billion in 2016 to N1.04 trillion in 2020, while the company’s production capacity has expanded from 42.55 million mtpa to 48.55 million mtpa in 2020.

Despite being the industry leader is yet to utilize its robust manufacturing infrastructure to full capacity, n0ting that about 25.72 million mtpa of cement and clinker and products were sold in 2020. Focusing on price appreciation, the shares of Dangote Cement from the price of N127.06 per share on February 1, 2016, are worth about 77% more in recent times, as the market value of the shares of the leading cement maker is currently put at N225 per share.