As global markets react to the recent Federal Reserve rate cut, Hong Kong's Hang Seng Index has seen a notable uptick, gaining 5.12% despite mixed economic data from China. This backdrop of shifting monetary policies and market optimism highlights the importance of stable income-generating investments. In such an environment, dividend stocks can offer a reliable source of returns through regular payouts. Here are three SEHK dividend stocks to consider, boasting yields up to 9.3%.
Overview: The People's Insurance Company (Group) of China Limited, an investment holding company with a market cap of HK$281.47 billion, provides insurance products and services in the People’s Republic of China and Hong Kong.
Operations: The People's Insurance Company (Group) of China Limited generates revenue from several segments, including Non-Life Insurance (CN￥486.03 billion), Health Insurance (CN￥26.88 billion), Life Insurance (CN￥21.47 billion), and Asset Management (CN￥2.87 billion).
Dividend Yield: 4.1%
People's Insurance Company (Group) of China shows a mixed profile for dividend investors. The company recently declared an interim dividend of RMB 0.063 per share and reported half-year earnings with revenue at CNY 292.34 billion and net income at CNY 23.40 billion, indicating strong financials. However, its dividend yield is relatively low compared to top payers in Hong Kong, and its historical dividend payments have been volatile and unreliable despite being well-covered by earnings and cash flows.
Overview: 361 Degrees International Limited is an investment holding company that manufactures and trades sporting goods in the People’s Republic of China, with a market cap of HK$7.53 billion.
Operations: 361 Degrees International Limited generates revenue from two main segments: Kids (CN￥2.18 billion) and Adults (CN￥7.13 billion).
Dividend Yield: 9.4%
361 Degrees International's dividend yield of 9.38% is among the top 25% in Hong Kong, but its sustainability is questionable due to a high cash payout ratio of 162%. Despite earnings growing by 16.4% last year and forecasted to grow annually by 12.88%, dividends have been volatile over the past decade. Recent financials show net income at CNY 789.7 million for H1-2024, with an interim dividend declared at HKD 0.165 per share payable on September 9, 2024.
Overview: Metallurgical Corporation of China Ltd. (SEHK:1618) operates in engineering contracting, property development, equipment manufacture, and resource development both domestically and internationally with a market cap of approximately HK$58.54 billion.
Operations: Metallurgical Corporation of China Ltd.'s revenue segments include Engineering Contracting (CN￥553.39 billion), Featured Business (CN￥31.46 billion), and Resource Development (CN￥6.54 billion).
Dividend Yield: 5.9%
Metallurgical Corporation of China's dividend yield is 5.91%, lower than the top 25% in Hong Kong. Despite stable and growing dividends over the past decade, recent earnings reports show a net income decline to CNY 462.55 million for H1-2024 from CNY 504.5 million last year, with profit margins dropping to 0.6%. The company’s dividends are not covered by free cash flows, raising sustainability concerns despite a low payout ratio of 39.9%.
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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:1339 SEHK:1361 and SEHK:1618.
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