(Ecofin Agency) - The agriculture segment on the Abidjan-based regional stock exchange BRVM showed mixed performances on Friday 9 April 2021. The observation was made based on market data consulted by Ecofin Agency.
The department’s overall dividend yield, which measures what investors would earn for each CFA franc invested on the shares of its constituent companies, is 0.9%. This level of return per share is the lowest in the financial market common to the member countries of the West African Economic and Monetary Union (WAEMU) when compared to the 9.48% yield in the utility sector. In short, this is the lowest dividend yield currently found on the BRVM. But this performance does not tell the whole story.
On a stock exchange, investors can measure their gains on dividend yields, but also on the capital gains generated by the shares they have bought and which are perceptible through the evolution of the indexes. The agricultural sector is unbeatable on the BRVM. Its index has risen by 31% since the beginning of the year, and by 71.2% over the last 12 months. A potential gain more attractive than the dividend itself.
Except for the Société des caoutchoucs du Grand-Bereby (SOGB), the other three companies operating in this sector have not distributed dividends since 2018. Yet, over the past 12 months, their share values have increased, supported by announcements of improved performance. For Société africaine de plantation d'hévéas de Côte d'Ivoire (SAPH) and SOGB, which published their performance at the end of the third quarter of 2020, net profits are up by 163% and 16.6% respectively.
PALM CI, for its part, has only published its results for the first quarter of 2020, but things seem to be positive with a net profit for the period (CFA6.8 billion), which has already wiped out all the losses for the 2020 financial year (-CFA 5.5 billion).
These good results augur well for the possibility of a resumption of dividend distribution. The question now is to know how low these agricultural values can fall. The publication of earnings to be distributed will be an additional indicator for investors.