As global markets react to the Federal Reserve's anticipated interest rate cuts, the Hong Kong stock market has shown resilience, with the Hang Seng Index advancing amid cautious optimism. In this environment, dividend stocks on the SEHK offer a compelling opportunity for investors seeking stable returns. A good dividend stock typically combines strong financial health with consistent payout histories and sustainable earnings growth. Given current market conditions, these attributes are particularly valuable for ensuring reliable income streams.
Overview: The People's Insurance Company (Group) of China Limited, an investment holding company, provides insurance products and services in the People’s Republic of China and Hong Kong, with a market cap of HK$251.82 billion.
Operations: The revenue segments of People's Insurance Company (Group) of China Limited include CN¥21.42 billion from Life Insurance, CN¥2.62 billion from Asset Management, CN¥26.90 billion from Health Insurance, and CN¥485.53 billion from Non-Life Insurance.
Dividend Yield: 4.7%
People's Insurance Company (Group) of China Limited recently affirmed an interim dividend of RMB 0.063 per share for the first half of 2024, with a final dividend for 2023 amounting to RMB 6.90 billion. The company's dividends are well-covered by earnings (payout ratio: 35.5%) and cash flows (cash payout ratio: 7.2%). Despite trading at a good value, its dividend yield is relatively low compared to top-tier payers in Hong Kong, and the dividend track record has been volatile over the past decade.
Overview: Jutal Offshore Oil Services Limited is an investment holding company that fabricates facilities and provides integrated services for the oil and gas, new energy, and refining and chemical industries, with a market cap of HK$1.32 billion.
Operations: Jutal Offshore Oil Services Limited generates CN¥2.98 billion from its oil and gas segment and CN¥64.13 million from its new energy and refining and chemical segment.
Dividend Yield: 9.7%
Jutal Offshore Oil Services has maintained a low payout ratio of 9%, ensuring dividends are well-covered by earnings and cash flows (cash payout ratio: 44.5%). Despite its high dividend yield of 9.68%, the company’s dividend history has been volatile over the past decade, raising concerns about reliability. Recent earnings showed significant growth, with net income rising to CNY 177.31 million for H1 2024, up from CNY 68.84 million a year ago, potentially supporting future payouts.
Overview: First Tractor Company Limited is involved in the research, development, manufacture, and sale of agricultural and power machinery globally, with a market cap of HK$15.12 billion.
Operations: First Tractor Company Limited generates revenue from the sale of agricultural and power machinery, as well as related products, on a global scale.
Dividend Yield: 4.5%
First Tractor's dividend payments are well-covered by earnings (payout ratio: 31.3%) and cash flows (cash payout ratio: 40.2%). Although the dividend yield of 4.53% is lower than the top tier in Hong Kong, recent earnings growth—net income increased to CNY 905.35 million for H1 2024 from CNY 754.14 million a year ago—suggests potential stability in future payouts despite a historically volatile dividend track record over the past decade.
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:1339 SEHK:3303 and SEHK:38.
