Recently, many institutions in the market have begun to advocate the "high dividend strategy". So let's take a look at what advantages "high dividend companies" have, and how their past performance is, and what are the targets in the current Hong Kong stock market worth paying attention to.
1
high dividends are generally concentrated in blue chip , and their past performance is better than Hang Seng Index
According to statistics, high dividend stocks are generally concentrated in blue chip companies, with outstanding profitability, and cash flow is sufficient. , for example, institution , Everbright , pointed out that Hang Seng's high dividend yield index, components are mostly distributed in large-cap companies, and are concentrated in industries such as finance, real estate construction, mining, and public utilities. The Hang Seng High Dividend Index company has a large overall scale. According to data on March 25, 54% of the Hang Seng High Dividend Index have a market value of more than HK$50 billion, 18% of the companies have a market value of between HK$20-50 billion, and 28% have no more than HK$20 billion. Among them, most of the companies with no more than HK$20 billion are real estate companies, which have a sharp decline in stock prices due to the impact of liquidity in the second half of 2021, resulting in a decrease in market value.
Data source: wind
Hang Seng High Dividend Rate Index component stocks has relatively high profitability and sufficient cash flow. Hang Seng high dividend yield index components usually have higher ROE than Hang Seng Composite Index, and there is a relatively sufficient cash flow . Statistically speaking, the net cash flow/operating income ratio generated by the operating activities of the Hang Seng high dividend index components continues to be higher than the overall market. Good profitability and sufficient cash flow are the basis for supporting stable and adequate dividends.
Data source: wind
Generally speaking, the high dividend yield index and the Hong Kong stock market performance rose and fell. However, when the market is poor or there is uncertainty, the high dividend strategy performs better.
Judging from the data of the Hang Seng High Dividend Rate Index since its establishment in 2012, the trend of the Hang Seng High Dividend Rate Index is highly synchronized with the Hang Seng Composite Index, basically showing a state of rising and falling at the same time.
Data source: wind
Although the overall trend of the two is relatively synchronized, when the economy is in a downturn or the uncertainty is relatively strong, the Hang Seng High Dividend Rate Index is more resilient than the Hang Seng Index . This is because high-dividend companies have a strong ability to resist risks. At the same time, when market fluctuations, investors can obtain certain dividend returns, so that hedges the losses of capital gains.
Data source: wind
Under different environments, the main sources of excess returns of high dividend sectors are different. The main sources of excess returns of the high dividend sector vary in different periods of the market. When the market is a bear market or a bull market as a whole, the excess returns of the high dividend sector are mainly affected by the changes in the index; when the market is in a volatile period, the increase or decrease of the index is not large, and the income from dividends is the main component of the excess returns.
Data source: wind
2
Merrill Lynch clock, the high dividend sector in Hong Kong stocks may usher in investment opportunities?
Merrill Lynch clock classifies the economic cycle into four stages: recession-recovery-overheating- stagflation-. Refer to other indicators such as PMI and OECD comprehensive leading indicators. According to these indicators, China's economic cycle can also be divided into four stages: overheating stage (CPI year-on-year growth + industrial added value year-on-year growth), stagflation stage (CPI year-on-year growth + industrial added value decline year-on-year), recession stage (CPI year-on-year decline + industrial added value decline year-on-year growth), and recovery stage (CPI year-on-year decrease + industrial added value growth year-on-year growth).
According to Merrill Lynch clock, my country has experienced 6 cycles since 2000. All six cycles have complete cycles, but the time lengths of each cycle vary. Everbright pointed out that at present, my country is in a new cycle of stagflation.
Data source: wind
Note: Orange is the period of overheating, light orange is the period of stagflation, gray is the period of declination, and light yellow is the period of recovery.
Overall, during the stagflation period and the recovery period, Hang Seng's high dividend yield index performed relatively well. China is currently in a transitional stage between stagflation and recovery. Judging from historical data, high dividend strategies performed well in these two stages. During the stagflation period, Hang Seng's high dividend yield index can still maintain a yield of 5.82%, far higher than bonds and other equity major assets. During the recovery period, the average range of Hang Seng High Dividend Rate Index rose and fell 24.88%, higher than the range yields of the Hong Kong stock market and bonds.
Data source: wind
High dividend strategy in the future may be a good investment choice. If the conflict between Russia and Ukraine causes energy prices to continue to rise, and inflation will remain high, the country may face a "stagflation-like" environment. If inflation falls, with the gradual increase in the "stable growth" policy, the domestic economy is expected to gradually get out of the trough and enter a recovery cycle. Therefore, in the future, high dividend strategies may be a good investment choice in the market.
3
High dividend company selection skills and reference target
Selecting high dividend company should also pay attention to certain skills. Institutional Cinda's strategy analysis has shared:
1. Pay attention to the detailed data of historical dividend payouts and the continuous dividend
. For the calculation of dividend yield, generally speaking, securities software will provide investors with two dividend yield data: the ratio of dividend payouts to stock prices in the past 12 months, and the ratio of dividend payouts to stock prices based on the financial statements of a certain year.
Many investors feel very happy when they see the dividend rate of 6%, and they buy it in a hurry. However, both of the above data may be misleading.
The first method of calculating dividend yield, that is, the ratio of dividend payouts to stock prices in the past 12 months, is the most likely deviation, which is to mistakenly regard the accumulated dividend payouts for two years as dividends for one year.
For example, a company paid a dividend of 0.5 yuan for fiscal year 2019 on July 1, 2020 and a dividend of 0.5 yuan for fiscal year 2020 on March 1, 2021. On April 1, 2022, if the company's share price is 10 yuan, its dividend yield in the past 12 months will become 10%. But it is obvious that the company's real dividend yield is 5%, and here the 10% dividend yield in the past 12 months is a wrong calculation, which does not take into account the situation of the corresponding dividend date of misalignment in the two fiscal years.
. For the second dividend yield calculation method, that is, divide the dividend payment from a certain fiscal year in history (often the past year) by the current stock price. The main problem is that it does not consider whether the dividend payments in history are continuous.
For example, a company pays a dividend of 0.1 yuan in 2018, 2019 and 2020, and a dividend of 0.6 yuan in 2021. So for the 10 yuan stock price in 2022, should the dividend yield of this company be 6% or 1%? The classic calculation method will tell us that the company's dividend yield is 6%, which looks good. However, the dividend yield corresponding to the current stock price of the average annual dividend payout in the past four years is much lower than 6%.
2. Pay attention to the motivation of corporate dividends
Generally speaking, high dividend payments by companies are rewards to shareholders, which is a good thing worthy of recognition. However, at some times, the purpose of corporate dividend payments is to distribute cash to major shareholders.
For example, the shareholding ratio of major shareholders is very high, so that major shareholders can get the big part of the dividend. Secondly, the company's dividend far exceeds its own profitability and is "distributed to shareholders by cash in stock, rather than cash from operating income." Finally, the company's major shareholders often have stock sales restrictions (such as the company has just been listed and has not exceeded the sales restrictions), so they can only obtain cash from the listed company through dividend payments.
3. Pay attention to the future sustainability of dividend payments
Although some companies currently pay high dividends and have been good in the past few years, this dividend payment is based on a relatively high industry prosperity in the past few years or one-time income of the company. In another case, some companies can also earn high income for several consecutive years by selling their land reserves. Whether the dividends of these companies can continue in the future requires a question mark.
4. Focusing on dividends does not mean only paying dividends
For investors who value dividend rates, they have found a relatively reliable investment method in investment: they value the business ability and valuation of the company, rather than short-term price fluctuations.
For example, the dividend payout ratio, that is, the ratio of dividend payout ratio. For example, one company earns 1 yuan per share and pays a dividend of 0.5 yuan, and the other company earns 0.6 yuan per share and pays a dividend of 0.5 yuan. So in terms of financial data alone, the first company is obviously better than the second company, although the dividend ratio is the same.
5. Pay attention to the industry and stocks
Since high dividend stocks are not common, they sometimes appear in several specific industries. At this time, investors must suppress their urge to invest heavily in a certain industry or even several companies, and would rather lose some book returns brought by high dividend yields, and ensure that the investment portfolio has sufficient diversification in the industry and company. Through the practice of "concentrated concepts and diversified positions", while obtaining profits, try to protect the security of your account as much as possible.
The following is filtered. As of April 1, 2022, the company's selection criteria are greater than HK$10 billion in market value. At the same time, some real estate companies with poor credit ratings are screened for investors' reference.
Data source: wind
Among them, Kerry Logistics, which has a high dividend yield, is due to the special dividend payment of Kerry Logistics shares in SF in September 2021; Kunlun Energy sold all the equity held by Beijing Pipeline and Dalian LNG to the National Pipeline Network, and the high dividend yield of the other related real estate companies is due to the industry characteristics of low stock prices and high dividend payments.
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