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Dividend investors are constantly searching for companies that can sustain and grow their dividends over time. Such companies tend to be good companies that can grow its profits over time.
One way to find these companies is to look for those that have long term dividend track record – more than 10 years.
But can we find them in Hong Kong? Well, the answer is yes! In fact, I’ll share with our readers one Hong Kong-listed stock that has paid a dividend for more than 20 years.
The dividend machine
The company I’m talking about is HSBC Holdings plc (SEHK: 5). There are plenty of things to like about HSBC as a dividend stock. To start with, it has been paying a dividend for more than 20 consecutive years. In 1999, it paid a dividend per share (DPS) of US$0.34. Since then, it has grown its DPS over the next two decades to US$0.51 in 2018.
The growth in the dividend is possible only if the company grew its underlying revenue and profitability. So how did HSBC perform financially during that period? Here are the numbers:
Source: HSBC’s annual reports
From the above, we can see that the bank grew its top line and bottom line over the years. At the current price of HK$59.10 (as of the time of writing), HSBC is trading at a trailing dividend yield of 6.7%.
From the above, we can see that HSBC has consistently paid a dividend every year over the last 20 years.
Nevertheless, investors should be reminded that past performance is no guarantee of future results. Thus, it’s important for individual investors to carry out further research before investing in the banking stock.
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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.