6 Highest-Yielding Chinese Stocks

by: Sammy Pollack

In general, Chinese stocks are not known for their dividends. However, there are some Chinese stocks that have dividends much larger than their peers. This article will list the 6 highest-yielding stocks in the iShares FTSE China 25 Index Fund (NYSEARCA:FXI). FXI has a total of 25 holdings and pays a yield of 1.9%. All of the stocks listed in this article have yields that are greater than FXI's yield.

China Mobile (CHL)

  • 3.87% yield
  • 42% payout ratio
  • $47.82 billion net cash
  • 10.9 times trailing earnings

CHL is the largest mobile phone company in the world. What makes CHL unique is its recession resistant qualities discussed here. CHL is my favorite stock in this article. For more on CHL click here.

Yanzhou Coal Mining Co (YZC)

  • 3.68% yield
  • 24% payout ratio
  • $1.83 billion net debt
  • 6.4 times trailing earnings

YZC is a Chinese coal miner. Like the rest of the coal mining industry, YZC has faced a difficult environment because of weakness in prices. I would avoid YZC now because coal prices will likely remain under pressure because of weakness in natural gas. For more on YZC click here.

Petro China Co (PTR)

  • 3.57% yield
  • 43% payout ratio
  • $28.81 billion net debt
  • 10.2 times forward earnings

PTR, partially stated owned, is China's biggest oil producer. The steady increase in oil prices over the past few years has helped PTR achieve massive profits. However, if oil prices begin to increase further the Chinese government will likely put tougher restrictions on the prices PTR can charge for gasoline. Click here for more on PTR.

China Petroleum & Chemical Corp (SNP)

  • 3.09% yield
  • 25% payout ratio
  • $32.2 billion net debt
  • 9.6 times forward earnings

SNP is similar to PTR, but SNP is more focused on refining instead of production. SNP is partially owned by the Chinese government. SNP has benefited from higher oil prices, but if prices increase too quickly the government will likely increase price controls from current levels. Click here for more on SNP.

  • 2.72% yield
  • 25% payout ratio
  • $5.67 billion net cash
  • 9 times forward earnings

CEO is the third largest oil and gas company in China. Like its larger competitors, PTR & SNP, CEO is largely controlled by the Chinese government. CEO differs from PTR & SNP in that CEO has more exposure to the natural gas business. For this reason, CEO has underperformed PTR and SNP over the past year. Weak natural gas prices make CEO less attractive than its larger rivals previously mentioned. For more on CEO click here.

China Life Insurance Co Ltd (LFC)

  • 1.98% yield
  • 42% payout ratio
  • $6.22 billion net cash
  • 18.8 times forward earnings

LFC operates in three separate divisions: life insurance, property insurance, and asset management. The company has had a storied history of dominance in the Chinese insurance business. For this reason, I believe LFC is a sound long-term bet on the Chinese economy. For more on LFC click here.


Collectively, all of these companies are in position to continue paying solid dividends. In addition to solid income generation, investors who buy these stocks will also gain exposure to China. CHL is my favorite of the group, followed by LFC, PTR, SNP, CEO, and lastly YZC.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.