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29 March 2024

UAE firms paying Dh13bn cash dividends for 2010

Picture used for illustrative purposes only. (AGENCY)

Published
By Vicky Kapur

Despite a lacklustre stock market performance, 50 listed firms on the Dubai and Abu Dhabi bourses are paying Dh12.8 billion in cash dividends for the year 2010, data compiled by Emirates 24|7 shows.

This is marginally above the Dh12.27b paid by UAE listed companies in 2009.

“Companies with the highest dividend yields provide a relatively safer investment,” says Shuaa Capital in its recently released GCC strategy note for equity investments. If that is the case, the top dividend payers in the country should make for solid investment assets, particularly because they have been consistent in their dividend payouts during the past years.

Together, the top 10 are doling out Dh9.77b in cash dividends – a massive 76 per cent of the total cash dividends announced by UAE firms.

Topping the list of cash dividend paymasters in the country, by value, is Abu Dhabi-listed Etisalat, which will be doling out Dh4.74b in cash dividends for the year – or, more than 37 per cent of the total amount of 2010 cash dividends announced by UAE firms so far. Etisalat has announced a 60 per cent cash dividend for the year 2010.

The UAE’s top dividend paymasters have, incidentally, been consistent in their payouts, with Etisalat paying a 60 per cent cash dividend – or, Dh4.31b – in 2009 as well. This was again more than a third (about 35 per cent) of the total cash dividend payout by UAE companies in 2009.

Although the top dividend paymaster – by a large margin – is a telecom firm, the remaining top 10 is heavily dominated by banks, which take eight of the remaining nine spots on the top 10 list.

At #2 on the list of dividend czars is Dubai-listed Emirates NBD bank, which will be distributing Dh1.11b – or, 8.7 per cent of the total – in cash dividends for 2010.

The bank has announced a 20 per cent cash dividend for the year.

Emirates NBD too has paid 35, 20 and 20 per cent cash dividends for the years 2007, 2008 and 2009, respectively. This means that the bank made similar payments (Dh1.11b) last year too.

Following Emirates NBD is another bank – First Gulf Bank (FGB) – which has announced a 60 per cent cash payout for 2010, and will accordingly be paying out Dh900m in cash dividends – or, over 7 per cent of the total. FGB too paid 50 per cent cash dividends – or, Dh750m – in 2009.

At #4 is National Bank of Abu Dhabi (NBAD), which will be paying a 30 per cent cash dividend for the year, amounting to Dh717.5m – or, 5.6 per cent of the total payout. NBAD paid 10 per cent cash dividends in 2009.

Rounding off the top 5 is Abu Dhabi Islamic Bank (ADIB), which has announced a 21.64 per cent cash dividend for the year 2010, amounting to Dh511.72m in payments – or, almost 4 per cent of the total. Although ADIB did not pay any cash dividends in 2009, it issued 20 per cent bonust shares for the year, while the bank paid 21.6 per cent in cash dividends for the year before (2008).

Commercial Bank of Dubai (20 per cent; Dh388.26m), Dubai Islamic Bank (10 per cent; Dh379.84m), Air Arabia (8 per cent; Dh373.34m), Mashreq bank (20 per cent; Dh338.16m), and Bank of Sharjah (15 per cent; Dh315m) comprise the remaining of the top 10 dividend paymasters in the UAE for 2010.

“One argument against dividend yield is that it might disappear in uncertain economic times. Against this, we make a case that the companies with the highest growing cash flow are, relatively, least likely to default on their dividends. Companies with the highest dividend yields and the highest earnings growth should therefore provide a relatively safer investment,” Shuaa Capital wrote in its report.