As of May 2024, the Hong Kong market has shown resilience with the Hang Seng Index gaining 3.11%, reflecting a positive sentiment among investors despite broader global economic uncertainties. This backdrop creates an interesting scenario for dividend-seeking investors, as stable, high-yield stocks could be particularly appealing in such an environment where steady returns are prized amidst fluctuating markets.
Overview: Financial Street Property Co., Limited operates in property management and related services across the People’s Republic of China, with a market capitalization of approximately HK$0.94 billion.
Operations: Financial Street Property Co., Limited generates revenue primarily from its provision of property management and related services, totaling CN¥1.51 billion.
Dividend Yield: 7.4%
Financial Street Property Co., Limited, with a Price-To-Earnings ratio of 6.8x, offers a dividend yield in the top 25% for Hong Kong at 7.42%. Despite recent earnings growth of 5.8% and revenue forecast to grow annually by 11.19%, the company has an unstable dividend track record and unreliable payments over the past three years. The proposed final dividend is RMB 0.173 per share for fiscal year 2023, supported by a payout ratio of 50.4% and cash payout ratio of 54.6%, indicating that dividends are well-covered by both earnings and cash flows.
Overview: Precision Tsugami (China) Corporation Limited is an investment holding company that specializes in manufacturing and selling computer numerical control machine tools, primarily serving Mainland China and international markets, with a market capitalization of approximately HK$3.88 billion.
Operations: Precision Tsugami (China) generates revenue predominantly through the manufacture and sale of CNC high precision machine tools, totaling CN¥3.34 billion.
Dividend Yield: 7.7%
Precision Tsugami (China) Corporation Limited, despite a short history of dividend payments spanning 6 years, offers a compelling yield of 7.7%, ranking in the top quartile of Hong Kong dividend payers. The dividends are supported by a payout ratio of 54.1% and a cash payout ratio at 35.3%, indicating reasonable coverage by both earnings and cash flows. However, the company's dividend track record is not yet proven over an extended period, reflecting potential risks in sustainability despite current stability.
Overview: Johnson Electric Holdings Limited is an investment holding company that manufactures and sells motion systems across various regions including Germany, the Czech Republic, France, North America, China, other parts of Asia, and South America, with a market capitalization of HK$11.65 billion.
Operations: Johnson Electric Holdings Limited generates its revenue from the manufacturing and sale of motion systems across key global markets, including Germany, the Czech Republic, France, North America, China, and other parts of Asia and South America.
Dividend Yield: 4%
Johnson Electric Holdings Limited, with a P/E ratio of 6.5x, sits below the Hong Kong market average. Its dividends, growing over the past decade and supported by a payout ratio of 17.8% and a cash payout ratio of 15.2%, show coverage by both earnings and cash flows. However, its dividend yield at 4.04% is lower compared to top Hong Kong dividend payers, and its track record reveals some volatility in payments over the last ten years despite recent earnings growth of 45.3%.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SEHK:1502 SEHK:1651 and SEHK:179.
