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We’re continuing our quest for international dividend stocks this week with 3 Chinese dividend paying stocks that all have low PEG/ high EPS growth forecasts, low debt, strong management metrics, and options trading available. All 3 of these stocks trade in the US.

This group includes an oil & gas firm, an insurance company, and a drug manufacturer. One of these firms, TPI, is listed in the Healthcare section of our High Dividend Stocks by Sector Tables, while the other two firms were added this week to our Covered Call Table and Cash Secured Puts Table.

Although CISG doesn’t have an impressive dividend yield, it does have very attractive option yields. We added both CISG and SNP to our Covered Call Table this week. Based on Friday’s prices, the annualized Jan. 2011 covered call yield for CISG is 23.99%, while Jan. 2011 SNP covered calls are yielding 17.5%.

We also added CISG and SNP to our Cash Secured Put Table, where CISG Jan 2011 put options are yielding over 24%, and SNP Jan 2011 puts are yielding over 12% annualized.

TPI’s options are very thinly traded, and don’t offer interesting yields at this time.

Dividend Schedules:

TPI pays a quarterly $.025/share dividend

SNP pays semi-annually, in July (paid $1.61), and October

CISG paid an annual dividend of $.26 in June*

*Note: Many of the financial websites have incorrectly listed CISG as paying $1.04/year, with a 4.45% dividend yield. The sites incorrectly multiplied CISG’s annual payment by 4.

Here are profiles for each firm, taken from their websites:

Cninsure:

Distributes a wide variety of property and casualty insurance products and life insurance products underwritten by both domestic and foreign insurance companies operating in China, and offers insurance claims adjusting services, such as assessment, survey, authentication and loss estimation, as well as other insurance-related services to individuals and institutions. As an insurance intermediary, the Company is not exposed to any underwriting risks.

Over the past 11 years, CNinsure has established a distribution and service network across China, with 57 affiliated insurance intermediary companies operating in the PRC, of which 50 are insurance agencies, three are insurance brokerages and four are insurance adjusting companies. With 45,039 sales professionals, 1,421 claims adjustors and 554 sales and service outlets, its distribution network reaches 23 provinces, including some of China's most economically developed regions and affluent cities in China, such as Beijing, Shanghai, Guangzhou and Shenzhen.

(Source: Cninsure website)

Sinopec:

One of the largest integrated energy and chemical companies in China, with integrated upstream, midstream and downstream operations, strong oil & petrochemical core businesses and a complete marketing network. SNP was incorporated on 25th February, 2000, and is China's largest producer and supplier of refined oil products (including gasoline, diesel and jet fuel, etc.) and major petrochemical products (including synthetic resin, synthetic fiber monomers and polymers, synthetic fiber, synthetic rubber, chemical fertilizer and petrochemical intermediates). It is also China's second largest crude oil producer. (Source: Sinopec website)

Tianyin Pharmaceutical Co.:

Headquartered in Chengdu, Sichuan Province of China, TPI is a leading manufacturer and supplier engaged in the development, manufacturing, marketing and sale of modernized traditional Chinese medicines and branded generics, with two state-of-the-art manufacturing facilities and an extensive nationwide sales and distribution network throughout China.

TPI manufactures and markets a portfolio of 56 products, of which 23 are listed in the highly selective National Medicine Catalog of the National Medical Insurance program, 7 are included in the essential drug list of China. They achieved 10 new drug approvals at SFDA in 2009, and currently have a pipeline of 10 products pending regulatory approval that target various indications.

(Source: Tianyin website)

Here’s how these 3 firms stack up vs. S&P 500 Valuation averages:

P/E

PEG

P/B

EPS GROWTH

THIS YEAR

EPS GROWTH

NEXT YEAR

EPS GROWTH

NEXT 5 YEARS

CISG

22.90

.76

3.50

55.04%

27.59%

29.97%

SNP

7.66

.26

1.20

145.13%

15.88%

29.70%

TPI

8.21

.12 *

1.29

2.08%

67.60%

NA

S&P 500 Averages

18.70

NA

3.40

NA

NA

NA


*TPI’S PEG is based only upon next year’s projected growth

Here’s a comparison of Financial Metrics:

Dividend Yield

ROA

ROE

ROI

DEBT/EQUITY

CISG

1.13%

13.12%

16.70%

15.56%

NO DEBT

SNP

3.30%

7.78%

17.56%

12.73%

0.39

TPI

3.58%

18.05%

18.81%

20.34%

0.03

S&P 500 Averages

2.49%

8.06%

18.62%

10.73%

0.75


TPI, the smallest of these 3 firms, ($75M market cap), reported very positive earnings and revenue growth in May 2010, for both their fiscal 3rd quarter and 9-month fiscal periods. Q3 sales rose 60%, and Q3 net income rose 53% vs. last year same period. 9-month revenue rose 50%, and net income rose 35% vs. last year same period.

CISG’s Q1 2010 revenues grew 31% and their net income rose 58% vs. last year same period. They’re expecting 35% earnings growth for Q2 2010. They expect the next three to five years to be the

golden period for the development of China’s insurance and financial services industries, in the wake of China’s widening economic recovery, the rapid accumulation of personal wealth by Chinese people and the PRC government’s stimulus incentives on domestic consumption.

(Source: CISG website)

SNP’s Q1 2010 net profit rose 40% vs. a year ago. They also raised $2.9 billion in China’s biggest bond offering to date this year.

Disclosure: No positions at this time.

Source: Three Undervalued Chinese Dividend Stocks