To Keep Reading
While it is common practice for many companies to pay a dividend if they are profitable, the frequency of dividend payments varies widely depending on the type of company and the industry it is in. Some companies have a practice of paying out dividends just once a year when annual results are announced, while others pay dividends twice-yearly when they report both half-yearly and annual results.
For investors who feel that six months may be a long time to wait between dividends, they can look for companies that pay quarterly dividends – every three months. Such companies are; however, not common as usually only REITs pay out quarterly dividends.
The advantage of quarterly dividend payments is that investors can receive money more regularly and it also provides better opportunities for compounding that dividend. So, here are two companies listed on the Hong Kong Stock Exchange that pay out a sustainable and consistent quarterly dividend to investors.
1. CLP Limited
CLP Limited (SEHK: 2) is a diversified utility and infrastructure group that owns and operates a variety of utility assets across five markets: Hong Kong, China, India, Australia and Southeast Asia (including Taiwan). As of 30 June 2019, the group’s power generation capacity (in operation and under construction) stood at 19,208 MW and it employs around 7,700 employees.
CLP has been paying out an increasing annual dividend over the years, with last year’s (FY 2018) total dividend of HK$3.02 per share a 3.8% year-on-year increase over FY 2017’s HK$2.91 total dividend. The group pays out a quarterly dividend, with a much larger final dividend compared to the first three quarters.
For FY 2018, CLP paid out an HK$0.61 per share interim dividend for the first three quarters followed by a final dividend of HK$1.19. FY 2019 is shaping up to be a year in which the group raises its dividend once again, with the first three quarters each paying out HK$0.63 per share worth of dividends. CLP’s trailing dividend yield is currently around 3.8%.
2. Sino Biopharmaceutical Limited
Sino Biopharmaceutical Limited (SEHK: 1177) researches, develops, produces and sells biopharmaceutical products as well as modernised Chinese medicine. The group owns research and development bases and pharmaceutical production bases in China covering a variety of diseases such as cancer, diabetes, digestion and nerve diseases. Sino Biopharm employs around 10,000 people and produces 1,000 kinds of products.
The group has been paying a quarterly dividend for the last 10 years, and in the previous fiscal year ended 31 December 2018, Sino Biopharm paid out a total dividend of HK$0.08 or HK$0.02 per quarter. For H1 2019, the group has continued to pay out a quarterly interim dividend of HK$0.02, totalling HK$0.04 for the half-year. The trailing dividend yield for the shares stands at 0.7%.
Note that the yield is very low because the shares are trading at high valuations of around 39x forward earnings. The group is growing at a rapid pace, with revenue more than doubling from FY 2014 to FY 2018 whereas net profit increased almost eight-fold.
Thinking about investing in Hong Kong stocks? Discover 4 simple ways to turn it into your own “money tree”. We outline practically everything you need to know about the Hong Kong market in our latest report. Click here to see how you can grab your FREE copy of “A Foolish Guide for Hong Kong Investors” today.
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 Royston Yang doesn’t own shares in any companies mentioned.