₦airaland Forum

awesomeJ:
😁😀
It should mean custom duties also come down.

Joyful365:
If you build a house, you'd hope for the price to appreciate (land and house). But in the meantime, you'll need rent to maintain the house and also do one or two things. If the rent isn't coming in then the house is useless. You're better off putting your money in a long term government bond where you get at least 17% annually.

If you are a good business person or financially smart, you can deploy that funds into a venture that will get you at least 50% annually (above inflation rate).

Stocks that don't pay good dividend are like houses that don't give you rent or money you put in a savings account in Nigeria. Inflation will wipe off the value of your money. God help you if the company is poorly managed and goes bankrupt. Your capital is gone. Good and consistent dividend paying stocks will ALWAYS appreciate in price over time. Stocks that don't pay dividend or pay poor dividend MAY appreciate. The wise person will go for ALWAYS.

starpower:
You are right to some extent, but there’s another point of view. If a company like Okomu makes revenue of ₦1,000, with net profit of ₦200 (which is impressive) and free cash flow of ₦150, but is currently trying to increase its palm oil refining capacity by 100%, it will need about ₦600 in capital expenditure over the next three years.

Do you think it’s better they reinvest earnings, or take loans at the current 35% interest rate? If there’s an opportunity to reinvest earnings at impressive rates of return, it’s usually better to let good quality management reinvest in the business. In four years’ time (not even factoring inflation), Okomu could potentially double earnings due to economies of scale from higher refining capacity and upgraded machinery. If the market assigns the right earnings multiple, you could easily have 3x your current purchase price — sometimes even 10x, like Beta Glass for those who bought in 2023.

The key is having a good capital allocator in management, running a business that consistently earns above-market returns on capital employed, and having a long horizon to grow. With that combination, you can have 1000× sef.

For context: I got Presco at an average small unit of ₦42, and Okomu at ₦68. But note this — Presco reinvested more earnings back into the business, while Okomu paid out more dividends. Those dividends have compounded well from 2020 till date. Now imagine if Presco had Okomu’s current earnings multiples — Okomu has gone 15×, while Presco has gone 35×.

So, to correct your assertion: quality stocks compound at a greater rate than real estate. Real estate mostly depreciates, and rental income often just covers repairs. You mainly make capital gains due to inflation. But a stock in a quality business — with high returns on invested capital, great management, strong pricing power, and a durable economic moat — doesn’t need to pay dividends. It’s better for such a company to keep compounding earnings.

I actually learnt this late, but I’m now making better choices after understanding. For example, ₦300k invested in 2020 compounding 35× is now ₦10m. Compare that to a 10% yield dividend stock — ₦30k yearly × 5 years = ₦150k, maybe the stock goes 4× after, so you end up with ₦1.35m (and that’s before deducting 10% withholding tax!).

Streetinvestor2:
The are waiting for who know road..lol

Mpeace:
I don't know where you pple get these figures. I just sold a few units following this post of yours. They bought at 1,530/1$.

Mpeace:
I don't know where you pple get these figures. I just sold a few units following this post of yours. They bought at 1,530/1$.

megawealth01:

starpower:
You are right to some extent, but there’s another point of view. If a company like Okomu makes revenue of ₦1,000, with net profit of ₦200 (which is impressive) and free cash flow of ₦150, but is currently trying to increase its palm oil refining capacity by 100%, it will need about ₦600 in capital expenditure over the next three years.

Do you think it’s better they reinvest earnings, or take loans at the current 35% interest rate? If there’s an opportunity to reinvest earnings at impressive rates of return, it’s usually better to let good quality management reinvest in the business. In four years’ time (not even factoring inflation), Okomu could potentially double earnings due to economies of scale from higher refining capacity and upgraded machinery. If the market assigns the right earnings multiple, you could easily have 3x your current purchase price — sometimes even 10x, like Beta Glass for those who bought in 2023.

The key is having a good capital allocator in management, running a business that consistently earns above-market returns on capital employed, and having a long horizon to grow. With that combination, you can have 1000× sef.

For context: I got Presco at an average small unit of ₦42, and Okomu at ₦68. But note this — Presco reinvested more earnings back into the business, while Okomu paid out more dividends. Those dividends have compounded well from 2020 till date. Now imagine if Presco had Okomu’s current earnings multiples — Okomu has gone 15×, while Presco has gone 35×.

So, to correct your assertion: quality stocks compound at a greater rate than real estate. Real estate mostly depreciates, and rental income often just covers repairs. You mainly make capital gains due to inflation. But a stock in a quality business — with high returns on invested capital, great management, strong pricing power, and a durable economic moat — doesn’t need to pay dividends. It’s better for such a company to keep compounding earnings.

I actually learnt this late, but I’m now making better choices after understanding. For example, ₦300k invested in 2020 compounding 35× is now ₦10m. Compare that to a 10% yield dividend stock — ₦30k yearly × 5 years = ₦150k, maybe the stock goes 4× after, so you end up with ₦1.35m (and that’s before deducting 10% withholding tax!).

emmanuelewumi:
Presco can't get a loan at 35%, even little me get loans at 26% to 29%.

Dividend payout ratio of Presco is currently about 60% up from 40%, and the 5 years compounded annualized earning growth rate is over 35%.

The dividend payout ratio of Nahco is 90% and their 5 year compounded annualized earning growth rate is about 40%.

Please let the shareholders breath, dividends don't lie.

We want our companies to keep on paying us our dividends


We can always reinvest our dividends or use it to diversify our investments

MrSamsung:
Thanks. I know all this already but I only asked when the English statement used is not clear/simple and straightforward because my curious and alert mind is always asking: "is there something I am missing perhaps a secret profitable deal(s) or opportunities I am not using or maximizing"

For example in your case when you mentioned "except co-founders", your statement was simple and straightforward but not clear without inserting a timeline(only possible timeline). So if I were a co-founder, with your "except co-founders" statement, I wanted to jump on the opportunity.

On the other hand I don't consider myself as I-too-know even on the things that I know, that'swhy I asked(though at times the questions might sound unreasonable/stupid with those who view it as common knowledge that you should know). Also other reasons eg. knowledge gets updated and we have to unlearn and relearn. Because at the end of the day with reminders and being reminded, we are persuaded or convinced even in the things that we do know.

Once again thanks

emmanuelewumi:
Presco can't get a loan at 35%, even little me get loans at 26% to 29%.

Dividend payout ratio of Presco is currently about 60% up from 40%, and the 5 years compounded annualized earning growth rate is over 35%.

The dividend payout ratio of Nahco is 90% and their 5 year compounded annualized earning growth rate is about 40%.

Please let the shareholders breath, dividends don't lie.

We want our companies to keep on paying us our dividends


We can always reinvest our dividends or use it to diversify our investments

chimex38:
I think this has to do with preferred shares or company shares of some sort.

1) Shares held by preferred shareholders are not part of issued shares(OS) we generally see. So shareholders fund are not diluted when preferred shares are issued.
2) Companies statements under equity shows those that have preferred shares or company(treasury) shares.

3)Preferred shares are paid fixed dividends every year
Unlike you and I that are common shareholders.

4) Preferred shareholders have no voting rights at meetings unlike common shareholders.

5) Common shareholders may not get shares every yr if a company makes loss but preferred shareholders will get the accumulated shares they've lost if the company resumes psynrtti over the years.
preferred shareholders might be paid from retained earnings but common shareholders may not at companies discretion.
6)The preferred shares are usually very large and usually held on for a life(HODL) like founding members or some form of sentimental or strategic value to holders.

TO ANSWER YOUR MAIN QUESTION!!
6) Irrespective of current share price(SP) of a company, MOST Preferred shares are sold at the nominal value if the owners want to sell(₦0.50k).
They can't sell at the appreciated price of the stocks.

Please fact check me...
May be wrong on some.

mikeapollo:

Madam and your son, indeed the whole family must be highly favoured, blessed and anointed for greatness, riches. They don't have to stress themselves and are probably less aggressive in monitoring and tackling all the stocks on NGX. Daddy is probably too aggressive for the billions in NGX so the Registrars are scared and afraid of him!

MrSamsung:
At the bolded, I am very appreciative for the information because to me it makes no sense mentioning it if it was of no use for an investor. Maybe for the accountants it is useful.

I just google it now, company buy/sell it's preferred stocks at nominal value(please correct me more if I google it wrong)

chimex38:
Yes. But they are guaranteed dividend. unless they convert to common shares.
I was as curious as you are as well, some yrs ago so I researched as well.
that's when I came across preferred shares. I am no expert.

MrSamsung:
At the bolded, I am very appreciative for the information because to me it makes no sense mentioning it if it was of no use for an investor. Maybe for the accountants it is useful.

I just google it now, company buy/sell it's preferred stocks at nominal value(please correct me more if I google it wrong)

MrSamsung:
The guaranteed dividends of preferred stocks, are the always above inflation, any experience?

chimex38:
I don't have experience. Just research and reading..
From deductive reasoning, i am not sure if it will always be above inflation. It will be relative to the profit of the company.

But they could be paid more than common shareholders in a given year or where common shareholders aren't paid at all sef.
also, they get first right of settlement incase of company liquidation or bankruptcy compared to common shareholders.

leo1234:
You just like trouble.

Mpeace:
I don't know where you pple get these figures. I just sold a few units following this post of yours. They bought at 1,530/1$.

Zagee:
Right now there are three markets-official, black and the fintech market.

Zagee:
Right now there are three markets-official, black and the fintech market.

megawealth01:
NAWAOH

megawealth01:
A lot of people kept quiet on this UNITY BANK miracles. Just imagine if the news had gone south you would have known that a lot of people were waiting to say that they warned newbies about following MEGAWEALTH01 into UNITY BANK but my JESUS nobi man 😘

Una for see silly analysis of UNITY BANK

zendi:
He deserves to cash in big from the book.
It is a very good book from the excerpts I've read. It is likely highly motivational, and it's powerfully titled too.

Making It Big.

Femi is actually a good story teller. I posted here sometime ago his narration of how Tony drbbled him out of Transcorp. And in this book, from what I've read, he's talking of how he lost 200b and lived to tell the story. He's actually a serial business survivor, and this will make an interesting read

This one is no MH He's not dumping the book on people.
It's his creative property and income stream forever.