Hong Kong's Hang Seng Index recently experienced a significant rally, bolstered by China's announcement of robust stimulus measures aimed at revitalizing its economy. This positive market sentiment provides a fertile backdrop for exploring dividend stocks, which can offer steady income and potential capital appreciation. In the current environment, a good dividend stock is typically characterized by solid fundamentals, consistent payout history, and resilience to economic fluctuations.
Overview: China Resources Gas Group Limited, with a market cap of HK$76.02 billion, engages in the sale of natural and liquefied gas and the connection of gas pipelines.
Operations: China Resources Gas Group Limited generates revenue from various segments, including HK$3.23 billion from gas stations, HK$9.65 billion from gas connection services, HK$4.34 billion from comprehensive services, HK$444.11 million from design and construction services, and HK$87.31 billion from the sale and distribution of gas fuel and related products (excluding gas stations).
Dividend Yield: 3.5%
China Resources Gas Group's interim dividend of HK$0.25 per share, with an ex-dividend date on 12 September 2024, reflects a growing payout trend over the past decade. Despite a relatively low dividend yield compared to the top Hong Kong payers, its dividends are well-covered by both earnings (55.5% payout ratio) and cash flows (61.6% cash payout ratio). However, investors should note the company's history of volatile and unreliable dividend payments.
Overview: Xtep International Holdings Limited designs, develops, manufactures, and markets sports footwear, apparel, and accessories for adults and children in China with a market cap of HK$14.70 billion.
Operations: Xtep International Holdings Limited generates revenue from three main segments: Athleisure (CN¥1.68 billion), Mass Market (CN¥12.31 billion), and Professional Sports (CN¥1.04 billion).
Dividend Yield: 3.8%
Xtep International Holdings' dividend yield of 3.8% is modest compared to top Hong Kong payers, but recent increases, including an interim dividend of HK$0.156 per share and a special dividend of HK$0.447 per share, highlight its commitment to shareholders. Despite a history of volatile dividends, current payouts are well-covered by earnings (48.8% payout ratio) and cash flows (33.9% cash payout ratio). Recent product launches and strong H1 2024 earnings growth underscore the company's robust financial health.
Overview: China Hongqiao Group Limited is an investment holding company that manufactures and sells aluminum products in the People's Republic of China and Indonesia, with a market cap of HK$121.48 billion.
Operations: China Hongqiao Group Limited generates revenue primarily from the manufacture and sales of aluminum products, amounting to CN¥141.48 billion.
Dividend Yield: 9.2%
China Hongqiao Group's dividend payments are well-covered by earnings (42.3% payout ratio) and cash flows (48.6% cash payout ratio), with a recent interim dividend of HK$0.59 per share declared for H1 2024. Despite being in the top 25% of dividend payers in Hong Kong, its dividends have been volatile over the past decade, raising concerns about reliability and sustainability. However, strong recent earnings growth and good relative value compared to peers offer some positives for investors.
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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:1193 SEHK:1368 and SEHK:1378.
