Is BIHL group still good for dividends investment?

Good morning 😃🌞☀️, let’s get into it

In the search for strong dividend-paying stocks on the Botswana Stock Exchange, Botswana Insurance Holdings Limited (BIHL-EQO) continues to stand out for many income-focused investors. But does it still earn a place in a long-term dividend portfolio in 2025? Let’s take a closer look.

The Numbers at a Glance

• Current Dividend Yield: 4.87%

• Dividend Growth Rate: 4.2%

• Dividend Per Share: P1.12

• Cash Payout Ratio: 63.2%

• Buyback Yield: 0.009%

• Payout Ratio (Earnings-Based): -279%

Market Comparison

BIHL’s dividend yield of 4.87% is higher than both the industry average (2.3%) and the bottom 25% of dividend payers in the Botswana market (3.4%). However, it falls short of the top 25% of dividend payers, where yields exceed 8.6%.

This positions BIHL as a mid-tier dividend payer — not among the highest, but still attractive compared to many other options in the market.

Sustainability: Cash Flow vs Earnings

Despite the negative payout ratio of -279%, which signals accounting losses, BIHL’s cash payout ratio of 63.2% tells a different story. The company is still generating enough cash flow to cover dividend payments comfortably.

This distinction is key. While the company may have booked losses on paper — possibly due to non-cash items or one-off events — it is still generating real cash, making the current dividend sustainable in the near term.

The Red Flags

• Negative earnings raise questions about long-term profitability.

• 3 out of 6 dividend health checks passed — indicating only moderate financial strength when it comes to dividend consistency and safety.

• Lack of clarity on future dividend dates and consistency may concern more conservative investors.

Final Verdict: Is BIHL Suitable for Dividend Investing?

Yes — with caution.

BIHL remains suitable for dividend investors seeking above-average yield in Botswana, provided the goal is income, not capital growth. Its dividend is well-supported by cash flow, and the company has shown modest dividend growth.

However, the underlying profitability concerns should not be ignored. Long-term investors should keep an eye on earnings recovery and management’s ability to sustain both operations and payouts in a volatile environment.

For dividend-focused portfolios, BIHL may still earn a place, but it is best paired with more consistent dividend performers to manage risk and ensure income reliability over time.

Upcoming Dividend Alert

• P7.20 per share expected on October 4th.

source: simplywallst