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2 Asian Banks With REIT-Like Dividends

Dividends are an income investor’s friend. In Asia, especially Singapore and Hong Kong, income investors usually have no complaints. This is because of the myriad of companies they can choose from which dish out an alluring dividend.

While it is common for investors to derive their income from real estate investment trusts (REITs), REITs are not the only companies they should consider. Here are two non-REIT companies in Asia that pay out a healthy dividend and might be worth adding to your income portfolio.

1. China Construction Bank

China Construction Bank Corp. (CCB) (SEHK: 939) is one of the “big four” state-owned banks in China. The bank has approximately 14,985 banking branches through which it serves its clients.

CCB has had a long history of paying out dividends which have been doled out since 2006. Dividends at the banking outfit have mostly increased year-on-year since then, apart from one dip seen in 2016.

The situation is slightly different for the Hong Kong investor though, due to fluctuations in exchange rates. Following that blip, the bank is now back on its old path of yearly increases.

The last 14 years have seen CCB’s dividends grow at a compound annual growth rate (CAGR) of 21.63%. At its current share price of HK$6.40 (as of the time of writing) and its most recent dividend payout of RMB 0.306 per share (HK$ 0.3606), this implies a dividend yield of 5.6%.

2. DBS Group Holdings Ltd

DBS Group Holdings Ltd (SGX: D05) is one of Singapore’s three largest banks. The group provides a wide and comprehensive range of banking services to individuals and corporations.

DBS has a strong dividend history, with payouts going as far back as 2001. Over the last 18 years, DBS has seen its dividend increase from S$0.26 per share to S$1.20, implying a compound annual growth rate (CAGR) of 8.87%.

This growth though has been like a roller coaster though – with some years being stagnant and other years seeing a decrease in the payout. The most notable cut came in 2009 on the back of the Global Financial Crisis. However, after 2009, DBS has managed to slowly grow its dividend per share again (which currently stands at S$1.20). With its share price at S$25.75 (as of the time of writing), this implies a dividend yield of 4.7%.

Foolish summary

We have looked at the solid dividend yields of two Asian banks in this article, one based in Singapore and the other in China.

From their lofty dividend yields, it is evident that income investors could look at other avenues rather than just REITs to derive their income streams.

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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 Saket Jhajharia owns shares in DBS Group Holdings.