For many Nigerians, investing in the stock market is not only about making money when share prices rise. Dividends can also provide a regular stream of passive income to shareholders.Read Original
But how much money would an investor actually need to put into Nigerian stocks to receive ₦10 million in dividends every year?
The answer depends largely on the dividend yield of the stocks held and whether the companies maintain their dividend payments.
The simple calculation
The basic formula is:
Investment required = Annual dividend target ÷ Dividend yield
Therefore, if an investor wants ₦10 million annually:
At a 5% dividend yield: ₦200 million
At a 6% yield: ₦166.7 million
At an 8% yield: ₦125 million
At a 10% yield: ₦100 million
At a 12% yield: ₦83.3 million
At a 15% yield: ₦66.7 million
This means an investor does not necessarily need ₦200 million if they are able to build a portfolio producing a higher dividend yield.
However, higher dividend yields can come with greater uncertainty because dividends are not guaranteed and share prices can change.
GTCO example: How much could ₦10 million in dividends require?
One example is Guaranty Trust Holding Company (GTCO).
Based on dividend data available in September 2026, GTCO's annual dividend was listed at ₦12.76 per share, with a dividend yield of about 9.31% based on its then-current share price.
Using a 9.31% yield as a simple illustration:
₦10,000,000 ÷ 0.0931 = approximately ₦107.4 million
So, at that yield, an investment of roughly ₦107.4 million would mathematically correspond to ₦10 million in annual dividends.
That is only a calculation based on the stated dividend and share price. It does not mean an investor is guaranteed to receive ₦10 million every year.
What if the portfolio earns 10%?
A 10% dividend yield makes the calculation easier.
₦10 million ÷ 10% = ₦100 million
An investor with a ₦100 million portfolio yielding 10% would generate approximately:
₦100 million × 10% = ₦10 million
This illustrates why dividend yield is important to income-focused investors.
However, investors should not simply select a stock because its calculated yield is high. A company's earnings, cash flow, debt, payout ratio and history of paying dividends can affect whether its dividend can be maintained.
Dividend payments can change
A common misconception is that buying a dividend-paying stock guarantees the same amount of money every year.
It does not.
Companies can increase dividends, reduce them, suspend them or pay no dividend at all, depending on their financial performance and board decisions.
For example, NGX Group declared a total ₦3 dividend per share for 2025, consisting of its interim and final distributions. The company subsequently announced another ₦1.30 interim dividend for the first half of 2026.
This demonstrates why dividend calculations should be based on actual declared dividends rather than assuming that a company's previous payment will continue indefinitely.
Some Nigerian stocks have historically offered strong dividend yields
The Nigerian banking sector has attracted considerable attention from investors looking for dividend income.
Data published in 2026 showed GTCO paying a total ₦12.76 per share for FY2025, while Zenith Bank paid ₦10 per share for the same financial year. Stanbic IBTC paid ₦10.65 per share.
Meanwhile, MTN Nigeria's 2025 financial-year dividend totalled ₦20 per share, including a ₦15 final dividend, according to Nairametrics. (
But the amount paid per share alone does not tell investors the actual yield. The share price at which the investor buys the stock must also be considered.
The same ₦10 million target can require different amounts
Consider this illustration:
| Dividend yield | Approx. investment for ₦10m yearly |
|---|---|
| 4% | ₦250 million |
| 5% | ₦200 million |
| 6% | ₦166.7 million |
| 7% | ₦142.9 million |
| 8% | ₦125 million |
| 9% | ₦111.1 million |
| 10% | ₦100 million |
| 12% | ₦83.3 million |
| 15% | ₦66.7 million |
The figures are mathematical illustrations and assume the yield remains unchanged.
What about dividend tax?
Investors should also distinguish between gross dividends and the amount that eventually reaches their account.
Nigeria's current withholding-tax information lists 10% WHT on dividends for resident recipients.
Therefore, if the objective is to receive ₦10 million after a 10% withholding deduction, the gross dividend would need to be approximately:
₦10 million ÷ 0.90 = ₦11.11 million
At a 10% dividend yield, that would imply approximately:
₦11.11 million ÷ 0.10 = ₦111.1 million
This is a simplified illustration; an investor's individual tax circumstances can differ.
Could someone build the portfolio gradually?
Yes.
An investor does not necessarily have to have ₦100 million or ₦200 million immediately.
Someone starting with ₦1 million, for example, could gradually add money to the portfolio and reinvest dividends. Over many years, additional contributions plus dividend reinvestment can increase the value of the portfolio.
The important distinction is that ₦10 million in annual dividends requires a substantial capital base unless the portfolio happens to generate an unusually high yield.
The biggest mistake to avoid
Investors chasing ₦10 million in annual dividends may be tempted to look only for stocks with the highest dividend yield.
That can be risky.
A very high yield may sometimes reflect a falling share price rather than a rapidly growing dividend. In addition, a company can reduce its dividend in a subsequent year.
For that reason, investors may examine:
Historical dividend payments
Profit after tax
Earnings per share
Cash flow
Dividend payout ratio
Company's debt position
Share price
Dividend growth
Sustainability of the company's earnings
Bottom line
To generate ₦10 million a year in gross dividends, the amount required depends on the portfolio's sustainable dividend yield.
At a 5% yield, approximately ₦200 million would be required. At 10%, it falls to about ₦100 million, while a 12% yield would require roughly ₦83.3 million.
Using GTCO's reported 9.31% dividend yield as a September 2026 illustration would put the required capital at about ₦107.4 million.
The figures are not investment guarantees. Dividend yields and share prices change, and companies can alter their dividend policies from one year to another.
