Attractive dividends, moderate operating costs and solid profitability levels have yielded positive ratings for Stanbic Holdings Uganda Ltd (SHUL) and Bank of Baroda Uganda (Bobu) from local equity analysts while British American Tobacco Uganda (Batu) and DFCU Ltd have received investment downgrades.
Findings contained in an equity research note compiled by financial analysts at Old Mutual Investment Group Uganda, formerly known as UAP-Old Mutual Financial Services Uganda Ltd, indicate a “buy” recommendation for SBU and Bobu shares traded at the Uganda Securities Exchange.
The average share price on the SHUL counter is projected to increase from Ush32.5 ($0.008) per share, registered at the end of 2023, amid strong revenue growth recorded over the past three years, cost management and improved dividend payouts.
Dividends
The financial services company declared a dividend of Ush2.15 ($0.0006) per share in 2021 followed by a dividend of Ush1.95 ($0.0005) per share offered to shareholders in 2022. It paid a dividend of Ush3.61 ($0.0009) per share in 2023.
Bobu declared a dividend of Ush1.67 ($0.0004) in 2021 followed by a similar one in 2022 and Ush2 ($0.0005) in 2023.
MTN Uganda shares, on the other hand, received a “hold” recommendation, which compels investors to retain their shareholding until issues of uncertainty surrounding the firm have been resolved.
The telcopaid dividends of Ush15.9 ($0.004) per share in 2022 while those in 2023 grossed Ush17.2 ($0.0044) per share.
The analysts offered a “sell” recommendation against Batu, which paid dividends at Ush406 ($0.1) per share in 2021 while dividends per share stood at Ush209 ($0.054) in 2022 but fell to Ush181 ($0.047) in 2023.
DFCU Ltd’s share price is forecast to fall, a scenario that motivated a “sell” recommendation from the analysts. The company paid dividends amounting to Ush17.38 ($0.004) in 2021 while no dividends were paid in 2022. A dividend of Ush81.9 ($0.02) per share was declared in 2023 according to company records.
