Financial service companies’ profitability tends to be tied to the economic cycle. These companies provide services ranging from consumer finance to investment banking. During downturns, financial services companies tend to be hit the hardest as net interest margins shrink and credit losses grows. However, during prosperous times, they report robust profits and many pay attractive dividends. Today I will share with you my list of high-dividend financial stocks you should consider for your portfolio.
China Everbright Limited (SEHK:165)
165 has a large dividend yield of 5.10% and has a payout ratio of 36.35% . While the yield has dropped at times in the last 10 years, dividends per share during this time have increased overall from HK$0.10 to HK$0.85. China Everbright is also reasonably priced, with a PE ratio of 7.1 that compares favorably with the HK Capital Markets average of 12.7. Continue research on China Everbright here.
Chongqing Rural Commercial Bank Co., Ltd. (SEHK:3618)
3618 has a juicy dividend yield of 4.54% and has a payout ratio of 21.22% , with analysts expecting a 22.91% payout in the next three years. Besides the potential capital gains, 3618’s yield alone is better than the low risk savings rate. Plus, a 4.54% yield places it amidst the market’s top dividend payers. More on Chongqing Rural Commercial Bank here.
China Zheshang Bank Co., Ltd (SEHK:2016)
2016 has a sumptuous dividend yield of 4.51% and is currently distributing 29.64% of profits to shareholders , with analysts expecting this ratio in three years to be 34.74%. With a yield above the savings rate, bank account beating investors will be happy, but perhaps even happier knowing that 2016 is in the top quartile of market payers. Analysts are optimistic on the company’s earnings in the next 12 months, estimating a 30.43% increase in EPS. Interested in China Zheshang Bank? Find out more here.
For more solid dividend paying companies to add to your portfolio, explore this interactive list of top dividend payers.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.