Is High Dividend Yield Always Good in Nigeria?

Short Answer

No. High dividend yield can be excellent when backed by strong earnings and cash flow, but it can also be a warning signal if the share price dropped due to weakening fundamentals.

Why Yield Can Look Artificially High

Yield rises when dividend stays flat but price falls sharply. In that case, the headline yield may look attractive while underlying risk is increasing.

How to Tell Good Yield from Risky Yield

Use a quality filter before acting.

• Check earnings stability across multiple periods.
• Check cash-flow support for payouts.
• Check payout consistency and management discipline.