Dividend Strategy: Buy UMME for High Yield, Then Rotate to Safaricom

Learn how to earn two dividends in one month by using a smart buy-sell approach on the NSE.

🔔 Dividend Events (July 2025)

Stock	Book Closure	Ex-Dividend Date	Dividend	Price
UMME	14 July	15 July	KES 8.00	KES 22.00
Safaricom	31 July	1 Aug	KES 0.65	KES 27.00

📌 Strategy Steps:

Buy UMME before 14 July to qualify for the KES 8.00 dividend.
Sell UMME after 15 July (ex-date) — price may drop, but dividend offsets it.
Use proceeds to buy Safaricom before 31 July to qualify for another dividend.

🧮 Return Scenarios from UMME

Dividend Yield: 8 ÷ 22 = 36.36%

Buy/Sell Costs: 1.64% on each side

Sell Price	Dividend	Net Sale Proceeds	Total Return	Net Gain	ROI
22.00	8,000	21,639.20	29,639.20	7,278.40	+32.6%
20.00	8,000	19,672.00	27,672.00	5,311.20	+23.7%
18.00	8,000	17,704.80	25,704.80	3,344.00	+14.95%

🔍 What These Numbers Mean:

Dividend: You receive KES 8,000 for 1,000 shares (KES 8 per share).
Net Sale Proceeds: This is after deducting the 1.64% brokerage and other charges.
Total Return: Dividend + Net sale amount.
Net Gain: Profit above your original investment of KES 22,360 (including buy charges).
ROI: Return on Investment as a percentage.

🔍 Explanation of Each Column

✅ 1. Sell Price

This is the price at which you sell UMME shares after the ex-dividend date. We’ve tested three scenarios: selling at KES 22, 20, or 18.

✅ 2. Dividend

You get KES 8 per share as a dividend because you bought before book closure. If you own 1,000 shares:

KES 8 × 1,000 = KES 8,000 dividend

✅ 3. Net Sale Proceeds

After selling your shares, you pay 1.64% in trading costs (brokerage + levies). So:

🧮 Net Proceeds = Sell Price × 1,000 × (1 - 0.0164)

Example:

At KES 22:

22 × 1,000 = 22,000
Cost = 22,000 × 1.64% = 360.80
Net Sale = 21,639.20

✅ 4. Total Return

This is what you actually pocket in total:

🧮 Net Sale Proceeds + Dividend

Example at Sell Price 22:

21,639.20 + 8,000 = 29,639.20

✅ 5. Net Gain

This is your profit after subtracting your original investment (which was KES 22,360 for 1,000 shares at KES 22 each, including buy cost):

🧮 Total Return – Initial Investment

29,639.20 – 22,360 = KES 7,278.40

✅ 6. ROI (Return on Investment)

This shows how profitable the trade was as a percentage:

🧮 ROI = (Net Gain ÷ Cost of Investment) × 100%

Example:

ROI = (7,278.40 ÷ 22,360) × 100 = +32.6%

🧠 What Does It Mean?

If you sell at KES 22, you get a massive 32.6% return in just a few weeks.

Even if the price drops to KES 18, you still walk away with a +14.95% gain, thanks to the dividend.

⚠️ Reminder:

UMME’s dividend is large because of Uganda's exit from the power concession.
The share price is likely to fall after 15 July (ex-dividend date).

💡 Strategy Tip:

It’s smart to sell after book closure (14 July), take the dividend profit, then rotate into another strong dividend stock like Safaricom, whose book closure is 31 July.

#SirInINumbers

📈 Why Switch to Safaricom?

Factor	UMME	Safaricom
Dividend Yield	✅ 36.36%	❌ 2.41%
Growth Potential	⚠️ Limited (Uganda concession ends 2025)	✅ Strong (M-Pesa, Ethiopia)
Liquidity	⚠️ Thinly traded	✅ High volume, easy to trade
Future Certainty	⚠️ Uncertain renewal	✅ Expanding markets