Seeking Alpha
Long/short equity, contrarian, research analyst, portfolio strategy
Profile| Send Message|
( followers)  

Due to the historically low yields in bonds, many investors searching for income have turned their attention to dividend paying stocks. For investors looking to gain exposure to China while generating income, the best play is China Mobile Ltd (NYSE:CHL).

(click to enlarge)CHL ChartCHL data by YCharts

China Mobile Yield vs Other Dividend Paying Chinese Stocks

  • China Mobile: 4.11%
  • China Unicom (NYSE:CHU): 1.16%
  • Petro China (NYSE:PTR): 3.9%
  • China Telecom (NYSE:CHA): 2.52%
  • China Life Insurance Co (NYSE:LFC): 2.5%
  • China Petroleum & Chemical (NYSE:SNP): 5.37%

CHL has the second highest yield behind SNP.

Net Cash/Debt

  • CHL: $48 billion net cash
  • CHU: $14 billion net debt
  • PTR: $49 billion net debt
  • CHA: $4 billion net debt
  • LFC: $11 billion net cash
  • SNP: $33 billion net debt

CHL is in by far the best financial position compared to the other companies. CHL could use the cash to boost its dividend yield significantly.

Conclusion

For investors looking to gain exposure to China and generate income, CHL is the best play. For a more in depth look at CHL, and other reasons to consider buying, I would recommend reading my initial piece on the company.

Source: China Mobile: The Premier China Dividend Play