JSE

South Africa’s top 7 dividend stocks in 2023

Published by
WIlliam Dube

Boasting as the largest stock exchange in Africa and ranking 14th globally, the Johannesburg Stock Exchange (JSE) in South Africa is a symbol of the country’s economic prosperity since the establishment of a democratic government in 1994. It serves as a hub for some of the world’s top dividend-paying stocks

Are you considering making some passive income? Dividend stocks could be a good place to start. This is a list of the top dividend stocks in South Africa:

1. ABSA Group

Earnings Per Share: R730.90

Return on Equity: R5.08

Estimated Dividend Yield: 8.92

Absa Group Description

One of the biggest international financial services groups with operations in 14 nations is the Absa Group, which is based in Africa. The ABSA Group caters to the African market and appears committed to achieving international acclaim. It’s management affirms that the banking group seeks to find tailored solutions to local banking challenges throughout the African continent. To achieve this, they provide a range of goods and services in the retail, corporate, investment, and wealth banking sectors, as well as solutions for investment management and insurance. ABSA GROUP is a publicly traded company on the Johannesburg Stock Exchange. ABSA Group is regarded as one of South Africa’s most reliable dividend payers.

The ABSA Group owns the majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania (Absa Bank Tanzania and National Bank of Commerce), Uganda and Zambia, as well as insurance operations in Botswana, Kenya, Mozambique, South Africa and Zambia. They also have representative offices in Namibia, Nigeria and securities entities in the United Kingdom and the United States.

2. Exxaro Resources

Earnings Per Share: R2,955.00

Return on Equity: 18.78

Estimated Dividend Yield: 18.78

Exxaro Resources Description

In November 2006, Kumba Resources Limited unbundled, and Kumba’s coal and other assets merged with Eyesizwe Coal to create Exxaro Resources Limited. Exxaro has since grown to become one of the largest black-empowered diversified mining companies in South Africa.

Exxaro has an asset portfolio, which includes coal operations and investments in iron ore, residual pigment manufacturing and renewable (wind) energy (Cennergi). The organization prides itself in being more than just a mining business and strongly believes that empowering local communities in which it operates and making a positive impact on the world is central to its purpose.

The company assumes and actively practices a balanced approach for sustainable growth and impact to ensure that a future us secured for everyone of its stakeholders. Exxaro’s purpose to Power better Lives in Africa and beyond will be achieved by responsibly investing in resources that will improve and sustain life on the continent. In the last decade, Exxaro has established itself as an organization that is respected by its peers for its innovation, ethics and integrity, and has been recognized as a leading performer in the FTSE Russel ESG Index.

3. Liberty Holdings

Earnings Per Share: R -582.90

Return on Equity: -7.68

Estimated Dividend Yield: 8.21

Liberty Holdings Description

Liberty was founded in 1957 by Sir Donald Gordon who watched his father work hard all his life yet reap little financial reward for his efforts. This struggle seems to have ignited in him the belief that all people should have the opportunity to grow their wealth and leave a proud legacy for their family. This belief is captured in the company’s name and flame, taken from America’s Statue of Liberty and imbued with the same meaning of freedom and opportunity.

4. Kumba Iron Ore

Earnings Per Share: R7,107.00

Return on Equity: 48.01

Dividend Cover: 1.46

Kumba Iron Ore Description

Kumba was incorporated in South Africa on 16 May 2005 and commenced trading in November 2006 following the unbundling of Kumba from Exxaro Resources Limited (previously Kumba Resources Limited). Subsequent to unbundling, Kumba listed on the JSE Limited (JSE) on 20 November 2006.

5. MTN Group

Earnings Per Share: R749.00

Return on Equity: 16.55

MTN Group Description

MTN was incorporated in the Republic of South Africa on 23 November 1994 (Company registration:1994/009584/06) and carries on the business of investing in the telecommunications industry through its subsidiary companies, joint ventures and associated companies. The Company’s shares are listed on the JSE under JSE: MTN in the mobile telecommunications sector.

6. Old Mutual Limited

Earnings Per Share: R116.10

Return on Equity: -7.61

Dividend Cover: 4.15

Old Mutual Limited Description

Old Mutual Limited is a premium African financial services Group, listed on the Johannesburg Stock Exchange (JSE), and has a standard listing on the London Stock Exchange, and secondary listings on the Stock Exchanges of Malawi, Namibia and Zimbabwe. The Company is registered and incorporated in South Africa.

7. Africa Rainbow Capital Investment

Earnings Per Share: R12.00

Return on Equity: 1.23

Africa Rainbow Capital Description

African Rainbow Capital Investments Limited (ARC Investments/the Company/ARCI) is a public company which is incorporated in the Republic of Mauritius and holds a Category One Global Business License under the Mauritian Financial Services Act of 2007. It is regulated by the Mauritian Financial Services Commission. The Company is listed on the Johannesburg Stock Exchange Limited (JSE). African Rainbow Capital is new but one of the most promising dividend stock stocks listed in the Johannesburg Stock Exchange.

Conclusion

When considering sources of passive income in South Africa most investors look into Dividend Stocks. The above list captures a significant amount of some of the more secure dividend stocks in South Africa.

What are Dividend Stocks?

In South Africa, Dividend Stocks are stocks of companies that listed on the Johannesburg Stock Exchange and have a reputation of paying out dividends on a regular basis, at least once per year.

How do dividends stocks work in South Africa?

Dividends Stocks give shareholders cash payouts on a regular basis, the payouts are proportional to the investors shareholding in the company. As long as you own shares of that company you will get the payout automatically. Dividend yields are set, but the company’s board of directors can change it at anytime.

It is important to understand that not all stocks are dividend stocks. Many companies decide to re-invest their profits into the business for expansion purposes.

References 

  1. ABSA BANK
  2. Exxaro Resources
  3. Liberty Holdings
  4. Kumba Iron Ore
  5. MTN Group
  6. Old Mutual Limited
  7. Africa Rainbow Capital Investments
WIlliam Dube

William Dube is a finance and economic news expert with over 10 years of experience in economic anaylsis, financial product assessment and market analysis. With a numerous certificates from prestigious universities including but not limited to Yale University and the University of Pennyslivenia. William specializes in providing insightful news developments in South Africa and commentary on investment strategies, risk management, and global economic trends. You can contact him on william@rateweb.co.za

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Published by
WIlliam Dube

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