Dividend yield hunt lures BRVM investors to Onatel stock
TLDR
- Onatel shares surge by 7.24% driven by high dividend yield demand, hitting 2,445 FCFA ($4.04).
- Onatel leads BRVM market in returns with 11.69%, attracting investors despite recent performance decline.
- Société Générale CI, SIB, and BOA Niger also see gains; Palmci, Sodeci, and SOGB face notable declines in the market.
Burgeoning demand for high dividend yields drove an investor frenzy over Onatel shares on Friday with the stock price soaring by 7.24% to 2,445 FCFA ($4.04). This surge comes after Onatel delivered the highest return on the BRVM market at 11.69% over the past year, attracting investors with the highest dividend yield despite low valuation and the company's recent decline in performance.
Onatel's robust performance led the session, with Société Générale CI (+1.45% to 17,500 FCFA), SIB (+1.05% to 5,760 FCFA), and BOA Niger (+0.75% to 6,045 FCFA) also posting gains.
Conversely, Palmci (-7.50% to 7,400 FCFA), Sodeci (-5.51% to 4,205 FCFA), and SOGB (-5.01% to 3,700 FCFA) experienced the most significant declines among the 26 decreases recorded, outnumbering the 7 increases during the trading session.
Key Takeaways
Onatel concluded the 2023 financial year on a subdued note. Despite a notable increase in the active customer base (+5% to 11.56 billion FCFA) and internet base (+11% to 7.16 billion FCFA), turnover fell by 4% to 139.15 billion FCFA compared to the previous year's 145.63 billion FCFA. The operating result contracted by 7% to 33.31 billion FCFA, with the result from ordinary activities at 30.27 billion FCFA. Management, faced with the choice of rewarding shareholders or strengthening competitiveness, opted for dividend distribution. Shareholders will receive a net dividend of 266 FCFA per share, offering the highest yield on the market at 11.69% for a price of 2,280 FCFA, payable from June 15, 2024. However, fully distributing profits to shareholders annually poses a significant risk, potentially leaving the company short of funds for future investments, which could be costly.
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