The Motley Fool

1 Chart Showing Why AIA Group Might Be a Great Long-Term Dividend Stock

AIA Group Ltd (SEHK: 1299) is one of the largest life insurance groups in Asia, with a presence in 18 markets across the Asia-Pacific region.

The company recently came onto my radar as a potential dividend stock to invest in. Here’s a simple chart to illustrate my point.

Long-term dividend growth

Source: AIA Group’s Annual Reports

For starters, AIA was listed in 2010 and only started paying a dividend in 2011.

From the chart above, we can see that AIA has grown its dividend per share (DPS) from 33 Hong Kong cents in 2011 to 123.50 Hong Kong cents (including a 9.5 cents special dividend) in 2018. This means DPS has grown by 274% during that period.

The growth in DPS was supported by strong underlying business performance. During that period, operating profit after tax (OPAT) grew from US$1.9 billion in 2011 to US$5.3 billion in 2018, up by 179%.

From the above, we can see that AIA’s dividend growth was nicely supported by the growth in its profitability.

Key takeaway

From the above, we can see that AIA is a candidate worth studying further by income investors given its strong track record in growing its dividend.

Nevertheless, one downside that investors should note is the company’s low dividend yield of 1.6%, which renders it less attractive (on a pure yield basis) as compared to many other dividend stocks in the market.

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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.