It is earnings seasons and Investors are expectant of the returns that will be posted by Listed corporates. In Nigeria, the earnings season is described as the period where Listed companies announce their prior year earnings with the associated dividend. HERE ARE 5 steps to successful Investments relating to dividend expectations and share prices in quoted equities:

  • Invest on rumor and sell on the news. (Analyze the unaudited results of the company of interest which typically comes 2 months before the actual dividend announcement)
  • A single digit P/E is preferable (Analyze the Price-earnings ratio as at the date of analysis)
  • Carry out the dividend growth analysis using the Myron Gordon Growth Model (Companies typically maintain a growth pattern in their dividend policy framework)
  • Observe the Payout ratio of the company also in the last 5 years. (You have the Earnings in the unaudited statement, you can reasonably project the next dividend announcement)
  • Finally, find a best price that seems comfortable to you (You must make decision before the dividends are announced. When they are news, the prevailing price already incorporates the dividend information value)


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