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Asia’s best dividend-paying stocks

Asia’s best dividend-paying stocks

We continue our fall series of reviews on reliable dividend stocks. We are looking for companies whose dividends are not only high, but are also consistent with profits and are steadily paid over the years. Long-term investors seek dividend stocks as a source of passive, non-speculative income. But it is vitally important to find a balance between the size of a dividend and the investment’s overall risk level.

Today we’re talking about Asian companies that meet the following criteria:

— Dividends have been steadily paid for the past 7 years.

— Dividends do not exceed the company’s profits. In other words, the company’s P/E ratio multiplied by the dividend payout ratio does not exceed 100%.

— The company has a P/E ratio of at least 3. This means the company is not extremely undervalued.

— The company has a market cap of at least $150M.

— If the company’s shares fell over the year, the decrease was not over 60%.

As a result, we compiled a list of companies attractive for investment purposes. Not only do all of them have high dividend yields (7–12%), but their P/E ratios are also low (3–10), so they are unlikely to face a significant drop in share prices. The national composition of companies does not vary much, as only 3 countries are represented in the rating: China, Taiwan and Saudi Arabia.

The review is based on data from https://www.finance.google.com. The stock charts use currencies of the respective exchanges. The rest of the data is in US dollars. The letter "M" stands for millions, "B" for billions. The $ symbol stands for the US dollar only.

1. Brilliant Circle Holdings

Brilliant Circle factory

— Symbol: 1008

— Exchange: Hong Kong Stock Exchange

— Country: China

— Currency: HKD

— Market cap: $229M

— Annual turnover: $180M

— P/E ratio: 6.8

— Dividend yield: 13.5%

— Payout ratio: 93%

— Consecutive years of dividend payment: 7

— Share price change YoY: -8%

Description. A Chinese package printing company and laminated paper manufacturer mainly operates in the cigarette package printing business. Brilliant also cooperates with many tobacco companies, publishers and other commodity producers.

Chart. Brilliant Circle share price hit an all-time high of 9 HKD per share in 2010 (not seen on the chart), but then gradually started to decline. In 2013, the collapse was particularly sharp, from 5 to 2 HKD, and now the long-term share price trend is still slightly negative. The company pays yearly dividends. Their absolute size has significantly decreased in 2014, but since 2015 the dividends have recovered to its previous levels (which is quite impressive taking into account the current low share price).

Pros. Highest dividend yield in the review despite the decrease in share price, low P/E ratio (likely indicating that the negative share price trend is over).

Cons. Long-term negative share price trend, highest payout ratio in the review, relatively short record of consecutive dividend payments.

2. Tomson Group

Tomson Riviera, one of the Tomson’s properties

— Symbol: 0258

— Exchange: Hong Kong Stock Exchange

— Country: Hong Kong

— Currency: HKD

— Market cap: $879M

— Annual turnover: $526M

— P/E ratio: 5.5

— Dividend yield: 11.7%

— Payout ratio: 64%

— Consecutive years of dividend payment: 10

— Share price change YoY: +41%

Description. An investment company focused on real estate and other large properties, as well as on entertainment industry. The company engages in film distribution and exhibition, concert organization, and golf club management. The company also owns a factory making consumer products of PVC, including toys and other leisure items.

Chart. For a long time, the company’s share price record was 3.9 HKD, which was back in 2009. But in 2016-2017, the stock witnessed a sharp price increase, and now the new historical maximum is 4.2 HKD. The company pays yearly dividends. The yield depends on the stock prices, but is consistently high, and the company increases its dividends almost every year.

Pros. Large dividends, positive share price and dividend trend, low P/E ratio.

Cons. No significant disadvantages found.

3. Ruentex Engineering & Construction

Interior design by Ruentex

— Symbol: 2597

— Exchange: Taiwan Stock Exchange

— Country: Taiwan

— Currency: TWD

— Market cap: $173M

— Annual turnover: $293M

— P/E ratio: 7.8

— Dividend yield: 10.3%

— Payout ratio: 80%

— Consecutive years of dividend payment: 8

— Share price change YoY: +5%

Description. A Taiwanese company engaged in civil and architectural construction business. Ruentex focuses on planning, construction and project management of objects that require non-standard engineering solutions, such as factories, railway stations and other industrial facilities. The company was founded in 1975.

Chart. Ruentex share price hit an all-time high in 2014, but then in 2015 it has collapsed and now the stock trades at around 40 HKD per share. The company pays yearly dividends. Their value depends on the stock prices, but in the past 4 years the dividend yield has been especially high in relation to the share price.

Pros. Large dividends, low P/E ratio.

Cons. No significant disadvantages found.

4. National Shipping Saudi Arabia

Sirius Star tanker

— Symbol: 4030

— Exchange: TADAWUL

— Country: Saudi Arabia

— Currency: SAR

— Market cap: $3.0B

— Annual turnover: $1.8B

— P/E ratio: 9.5

— Dividend yield: 9.0%

— Payout ratio: 86%

— Consecutive years of dividend payment: 10

— Share price change YoY: -15%

Description. A shipping company principally engaged in the purchase, sale and operation of vessels for the cargo transportation. The company transports crude oil, chemical products, general cargo, and dry bulk cargo and owns some of the world’s largest oil tankers. The company operates in Europe, North America, Middle East and South Asia.

Chart. The company’s share price was relatively high in 2015, but then gradually began to decline. The company pays dividends once a year, and their size has grown significantly since 2016, despite the decline in the share price.

Pros. High dividends with relatively long record of consecutive payments, large company size.

Cons. Negative share price trend.

5. Rivera Holdings Limited

Rivera owns some of the buildings in Zhangjiang high-Tech Park

— Symbol: 0281

— Exchange: Hong Kong Stock Exchange

— Country: Hong Kong

— Currency: HKD

— Market cap: $191M

— Annual turnover: n/a

— P/E ratio: 3.2

— Dividend yield: 8.8%

— Payout ratio: 28%

— Consecutive years of dividend payment: 11

— Share price change YoY: +21%

Description. An investment holding company engaged in property development, securities trading and investment business. The company directly participates in planning and constructing development projects and owns a significant share of Tomson group (mentioned above).

Chart. For a long time, the record price of the company’s shares was 0.66 HKD, set in 2007 at the peak of the real estate bubble. Later, the price has collapsed, but in 2012 the company entered a new steady growth period. In 2017, a new historic maximum of 0.68 HKD was set. The company pays dividends yearly. For several years, their value was 0.02 dollars, but in 2017 it rose sharply to 0.05 HKD per share.

Pros. High dividends with the longest record of consecutive payments and the lowest payout ratio in this review, long-term positive share price trend, the lowest P/E ratio in this review. Taking into account these advantages, the recent take-off of dividends does not seem to be a one-off promotion: with such profitability, the management will easily be able to maintain such levels of dividends even further.

Cons. No significant disadvantages found.

6. Al-Babtain Power & Telecommunication

Al-Babtain Trunkey project

— Symbol: 2320

— Exchange: TADAWUL

— Country: Saudi Arabia

— Currency: SAR

— Market cap: $307M

— Annual turnover: $333M

— P/E ratio: 7.2

— Dividend yield: 8.6%

— Payout ratio: 63%

— Consecutive years of dividend payment: 9

— Share price change YoY: +9%

Description. An energy and telecommunications company. Al-Babtain builds and maintains communication lines, and provides solutions for power and telecommunications infrastructure. The company also supplies transmission and distribution towers, structural steel, and steel pipes and tubes to electrical utilities.

Chart.The company’s shares traded relatively high in 2015, but then dropped in half. The company pays dividends 1 or 2 times a year, their annual size varying in the range of 1–2 Sri per share.

Pros. High dividends, low P/E ratio, relatively low payout ratio.

Cons. Unstable dividends.

7. SYSTEX Corporation

SYSTEX chiefs

— Symbol: 6214

— Exchange: Taiwan Stock Exchange

— Country: Taiwan

— Currency: TWD

— Market cap: $521M

— Annual turnover: $537M

— P/E ratio: 10.3

— Dividend yield: 8.6%

— Payout ratio: 88%

— Consecutive years of dividend payment: 7

— Share price change YoY: +10%

Description. A Taiwanese IT service provider. The company pays considerable attention to the financial sector by producing turnkey solutions for market analytics and supplying market data to its customers. Moreover, SYSTEX offers professional technology integration services, infrastructure solutions, and software development and integration services.

Chart. SYSTEX share price hit an all-time high of 80 TWD in 2015. Now the stock fluctuates around 10 TWD, with no pronounced positive or negative trend. The company pays dividends once a year. Their size tends to grow, but the trend is a bit unstable. For example, in 2015 the dividends were low despite the high share price: just 1.49 TWD. In all other years they were at least 2 TWD per share.

Pros. High dividends.

Cons. Highest P/E ratio in this review, relatively short record of consecutive dividend payment.

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