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Why Vitasoy International is a Rock-Solid Dividend Stock

Vitasoy International Holdings Ltd (SEHK: 345) is a food and beverage company, famous for its flagship Vitasoy branded soy milk.

It has had a phenomenal run-up in its share price, as well as growth in its dividend. In this article, I’ll explore exactly why Vitasoy is a solid and reliable dividend company for investors.

Big outperformer

To start with, let’s have a quick overview of Vitasoy’s dividend per share (DPS) track record for the last decade.

Source: Vitasoy’s Annual Reports

From the above, we can see that Vitasoy has grown its DPS from 16.6 cents in 2010 to 41.8 cents in 2019. In other words, its DPS grew by 92% over the last 10 years. Moreover, DPS is either maintained or grown over the period (no year-on-year decline in DPS in any single year)! Personally, I think that’s a solid track record.

Such performance can only come from sustainable growth in Vitasoy’s underlying profitability. So, let’s take a look at its financial numbers below.

In the last decade, Vitasoy grew its revenue from HK$3.0 billion (US$383.3 million) in 2010 to HK$7.5 billion in FY18. Similarly, its net profit grew from HK$260 million to HK$696 million over that same period. The former was up by 150% while the latter surged 168%.

Such strong growth in underlying performance was the main reason that Vitasoy could consistently grow its DPS over the years.

Key takeaway

Vitasoy has demonstrated solid performance in the last decade growing its business, as well as dividends. Going forward, the group is well-positioned to continue its upward trajectory, especially given its significant exposure to the growing Mainland China markets.

買匯豐收息作為退休儲蓄已經不合時宜,增長型收息港股會更為合適。中國從依賴出口轉型倚重內需消費,中產階級不斷擴大,在此長線結構性趨勢下,我們發現當中隱藏《一隻可望增值十倍的市場新貴》,對追求長線回報的您絕對不容錯過。

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Lawrence Nga doesn’t own shares in any companies mentioned.