As global markets experience fluctuations with rate cuts and economic data shaping investor sentiment, the Hong Kong market has shown resilience amidst these changes. For investors seeking stability and income, dividend stocks can be an attractive option in such a dynamic environment. A good dividend stock typically offers consistent payouts, solid financial health, and potential for long-term growth. In this article, we will explore three notable dividend stocks listed on the SEHK, including ENN Energy Holdings.
Overview: ENN Energy Holdings Limited is an investment holding company that focuses on the investment, construction, operation, and management of gas pipeline infrastructure in the People’s Republic of China with a market cap of HK$53.01 billion.
Operations: ENN Energy Holdings Limited generates revenue from several segments, including Wholesale of Gas (CN¥40.99 billion), Value Added Business (CN¥7.74 billion), Retail Gas Sales Business (CN¥67.73 billion), Integrated Energy Business (CN¥15.95 billion), and Construction and Installation (CN¥5.58 billion).
Dividend Yield: 6.2%
ENN Energy Holdings offers a dividend yield of 6.22%, which is lower than the top 25% of dividend payers in Hong Kong. The company has a stable and growing dividend history over the past decade, but its current high cash payout ratio (114.2%) raises concerns about sustainability. Recent results show mixed performance, with sales increasing but net income declining to CNY 2.57 billion from CNY 3.33 billion year-over-year, impacting earnings coverage for dividends.
Overview: Shanghai Industrial Holdings Limited is an investment holding company with a market cap of HK$11.81 billion, operating in infrastructure and environmental protection, real estate, consumer products, and comprehensive healthcare across Hong Kong, China, the rest of Asia, and internationally.
Operations: Shanghai Industrial Holdings Limited generates revenue from its Real Estate segment (HK$17.26 billion), Consumer Products segment (HK$3.59 billion), and Infrastructure and Environmental Protection segment (HK$9.42 billion).
Dividend Yield: 8.7%
Shanghai Industrial Holdings offers a high dividend yield of 8.66%, placing it in the top 25% of dividend payers in Hong Kong. However, its dividends are not well covered by free cash flows, with a cash payout ratio of 109.4%. Despite a reasonably low payout ratio of 31.5%, the company's dividend payments have been volatile and unreliable over the past decade. Recent earnings showed a decline, with net income dropping to HK$1.20 billion from HK$1.38 billion year-over-year.
Overview: China CITIC Bank Corporation Limited offers a range of banking products and services both within the People’s Republic of China and internationally, with a market cap of HK$313.30 billion.
Operations: China CITIC Bank Corporation Limited's revenue segments include CN¥41.32 billion from Personal Banking, CN¥76.07 billion from Corporate Banking, and CN¥25.62 billion from Treasury Operations.
Dividend Yield: 9%
China CITIC Bank's dividend yield is among the top 25% in Hong Kong, with recent interim dividends of RMB 1.847 per 10 shares announced for H1 2024. The bank's payout ratio is reasonably low at 41.4%, indicating dividends are well covered by earnings, and forecasts suggest continued coverage over the next three years. However, its dividend history has been volatile, and shareholders experienced dilution in the past year.
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:2688 SEHK:363 and SEHK:998.
