Dividends and Share Price Movements: A Comprehensive Analysis of 13 Companies on the Uganda Stock Exchange

By John Kusolo

Keith Kalyegira CEO of the securities market regulator of Uganda, Capital Markets Authority says there have been varying changes in share prices and market capitalization over time. Some companies have shown positive growth in share prices, while others have experienced negative movements. These fluctuations can impact dividend payments to shareholders.

Dividends are a crucial aspect of shareholder returns, providing investors with regular income from their investments.

In this article, we will delve into the dividends paid to shareholders by 13 prominent companies listed on the Uganda Stock Exchange (USE) and analyze the movements in their share prices over time. By examining the initial public offering (IPO) share prices, current market caps, adjusted share prices, and compound annual growth rates (CAGR) of share prices, we can gain insights into the financial performance and value creation for shareholders.

Analysis of Dividends and Share Price Movements

1. British American Tobacco Uganda (BATU): BATU, listed on the USE since its IPO in 2000, has consistently rewarded shareholders with increasing dividends. With an IPO share price of UGX 1,000 and a CAGR of share price at 13%, BATU has experienced substantial growth. The current market cap of UGX 736,199.76 million reflects the company’s solid performance and value creation.
3. Bank of Baroda Uganda (BOBU): BOBU, listed since 2002, has demonstrated steady growth, providing shareholders with both dividends and capital appreciation. The adjusted share price stands at UGX 5,312.50, with a CAGR of share price at 10%. BOBU’s success in maintaining profitability and expanding its market presence has contributed to favorable returns for shareholders.

3. Cipla Quality Chemical Industries Limited (CQCIL): CQCIL, listed in 2018, has experienced a decline in share price since its IPO. Despite this, the company may have distributed dividends to compensate for the decrease in share value. CQCIL’s adjusted share price is UGX 60.00, with a negative CAGR of share price at -28%. It is important to note that dividends play a significant role in shareholder returns, even during periods of share price volatility.

4. DFCU Limited (DFCU): DFCU, listed since 2004, has consistently provided favorable returns to shareholders. With an adjusted share price of UGX 1,956.12 and a CAGR of share price at 12%, DFCU has exhibited steady growth in share value. The company’s ability to maintain profitability and sustain dividend payments has contributed to its investors’ satisfaction.

5. MTN Uganda (MTNU): MTNU, the most recent IPO in 2021, has experienced a decline in share price since its listing. However, the company may have provided dividends to shareholders during this period. With an adjusted share price of UGX 170.09 and a CAGR of share price at -13%, MTNU’s performance in the market requires further analysis to understand the factors impacting its share price movement.

6. National Insurance Corporation (NIC): NIC, listed since 2010, has shown a modest decline in share price. However, dividend payments may have compensated for this decline, contributing to shareholder returns. With an adjusted share price of UGX 26.29 and a CAGR of share price at -4%, NIC has sustained its commitment to shareholder value through dividend distributions.

7. New Vision Limited (NVL): NVL, listed in 2004, has displayed steady growth in its share price. With an adjusted share price of UGX 232.50 and a CAGR of share price at 1%, NVL has provided shareholders with consistent returns. Dividends, in conjunction with capital appreciation, have contributed to the company’s success in delivering value to its investors.

8. Stanbic Bank Uganda (SBU): SBU, listed since 2007, has demonstrated a positive trajectory in share price performance. With an adjusted share price of UGX 210.00 and a CAGR of share price at 7%, SBU has rewarded shareholders with consistent growth and dividend payments. The company’s commitment to profitability and strategic initiatives has generated value for its investors.

9. Uganda Clays Limited (UCL): UCL, listed since 2000, has experienced substantial growth in share price. With an adjusted share price of UGX 27,000.00 and a CAGR of share price at 9%, UCL has delivered significant returns to shareholders. The company’s performance in the construction industry and its ability to generate profits have translated into attractive dividend distributions.
11. Umeme Limited (UMEME): UMEME, listed since 2012, has displayed positive share price movement. With an adjusted share price of UGX 300 and a CAGR of share price at 1%, UMEME has provided shareholders with stable returns. The company’s focus on improving electricity distribution services and maintaining profitability has translated into consistent dividends for investors.

Analyzing the dividends paid to shareholders by the 13 companies on the Uganda Stock Exchange (USE) and their share price movements provides valuable insights into the financial performance and value creation for investors. While some companies have exhibited steady growth in share prices and consistent dividend payments, others have faced market challenges resulting in declining share prices.

Nevertheless, dividends have played a crucial role in providing income to shareholders and compensating for fluctuations in share prices. Understanding these dynamics can assist investors in making informed decisions and assessing the potential returns from their investments on the USE.