Introduction

Conoil's share price has been on a rollercoaster, and investors who held on through the volatility are now seeing only a modest recovery. Despite stronger earnings in 2026, the company's dividend yield remains below one percent at current prices. This article examines whether Conoil is in a position to reward shareholders with a larger payout for the 2026 financial year.

What Happened

An investment of N100,000 made at the end of 2024 was worth roughly N54,240 by the end of October 2026, excluding dividends and trading costs. The stock jumped 361.5 percent in 2024, moving from N83.90 to N387.20, before shedding 51.7 percent in 2025 to close at N187.20. In 2026, shares rebounded 12.2 percent to N210.00 by October and held that level through November 11. However, that bounce recovered only a small fraction of the N200 per share lost during the previous year, and Conoil trailed the broader NGX Oil & Gas Index, which gained 127.90 percent over the same ten-month window.

Dividend policy also tightened. Conoil distributed payments every year from 2021 through 2025, but the board reduced the payout from N3.50 per share for 2024 to N2.00 for 2025. At N210 per share, that latest dividend translates to a gross yield of just 0.95 percent.

Why This Matters

Earnings suggest there is room to move. Conoil reported N7.65 per share for the first nine months of 2026, more than double its full-year 2025 result. If the final quarter repeats the third quarter's N0.22 per share, full-year earnings would land around N7.87. A restored N3.50 dividend would absorb about 44.5 percent of those earnings, a lower payout ratio than the N2.00 dividend represented for 2025.

The challenge is cash, not profit. Conoil generated only about N275 million in operating cash flow during the first nine months, while borrowings increased and bank balances declined. Trade and other receivables absorbed N23.35 billion over the same period, meaning much of the company's revenue is still tied up in unpaid customer invoices. Restoring the N3.50 payout would cost roughly N2.43 billion, about N1 billion more than repeating the N2.00 payment. Without faster collections, funding that amount could force Conoil to rely on expensive overdrafts.

Key Takeaways

  • Conoil shares remain well below their 2024 peak despite a partial 2026 recovery.
  • The 2025 dividend was cut to N2.00 per share, producing a yield under 1 percent at current prices.
  • First-nine-months 2026 earnings more than doubled the prior full year, supporting a higher payout ratio.
  • Restoring N3.50 per share would cost approximately N2.43 billion and consume less than half of projected earnings.
  • Weak operating cash flow and N23.35 billion in receivables mean management must collect customer payments faster before committing to a larger dividend.

Conclusion

Conoil does not need to return to its 2024 earnings peak to justify a better dividend. At N210, the market is already pricing in a recovery, yet shareholders are receiving less than 1 percent in cash yield. Restoring the N3.50 payout would lift that figure to 1.67 percent and return more than half of annual earnings to the business. The path forward is clear: prioritize overdue collections, tighten credit terms, and if the cash position allows after covering operating costs, reinstate the higher dividend for 2026.