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Alex Lega is Head of Investment at an independent financial company Mr Lega was formerly working for a large Investment Bank in London where he was advising institutional clients on complex structured products strategies and various investment opportunities. In 2006, realizing how Europe would... More
  • 4 Asian stocks that increased dividend payment for the past 3 years  0 comments
    Jun 13, 2011 6:45 AM

    If you are a value investor, the price of a stock alone is not a good indicator.
    You may want to look at a positive momentum for the stock, dividend factors and market consensus.

    A. Construction of the list:

    To construct the list we looked at stocks on an upward trend (i.e: current price above/at 20-, 50-, 200-day moving averages levels).
    Then we gathered those names that were trading at a PE ratio below the Index

    Those companies pay dividends, have increased their dividend payout for the past 3 to 5 years and dividends are sustainable as the payout ratio below 70%

    Market consensus:

    Investors usually value the view of analysts when looking at stocks.
    Those names in the list are rated 4 or above (out of 5)

    B. The list:

    1. Link Reit: (823 HK) - HK$ 26.95
    The REIT includes 180 properties, primarily shopping malls and carparks, formerly owned by the HK Housing Authority, a HK Government agency and was created to privatize the said properties.

    At HK$26.95, the company's market cap is around US$ 7.7 billion, that is at a price-to-book of only 1.1 .
    The stock is up 11.59% this year and trading off its 52w low of HK$ 19.26 and near its 52w high of HK$ 27.6 .
    Dividend yield is 4.1% with a 12.93% dividend growth over the past 3 years.

    Sustainability of dividends:
    Dividend payout ratio: 16.1% (i.e retained earnings:  83.9%)

    Market consensus:  4.06 / 5
    12 month target price: HK$ 28.27
    (source: bloomberg)

    2. YGM Trading: (375 HK) - HK$ 18.3
    YGM Trading's extensive retail network consists of over 800 retail outlets throughout Hong Kong, Macau, China, Taiwan, South-east Asia, Europe and the U.S. The company has been actively developing the Greater China market for more than 10 years. It boasts retail outlets in major cities such as Beijing, Shanghai and Guangzhou, and is expanding the network to many secondary and tertiary cities. The company is now operating over 200 outlets in China with the expectation to grow further in the core and developing cities. Brands: Guy Laroche, Ashworth, Charles Jourdan, Aquascutum...

    At HK$ 18.3, the company's market cap is US$ 382 million, that is a P/E ratio of only 11.4 .
    The stock is down 10.3% this year, trading off its 52w high of HK$ 24.65 .
    Dividend yield is 3.57% with a 8.61% dividend growth over the past 3 years.

    Sustainability of dividends:
    Dividend payout ratio: 43% (i.e retained earnings:  57%)

    Market consensus:  4.34 / 5
    12 month target price: HK$ 34.5
    (source: bloomberg)

    3. China Overseas Land & Investment Ltd (688 HK) - HK$ 15.35
    The company's core business is the development and sales of property projects. It has successfully invested and developed numerous popular  properties in 22 cities or regions, namely Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Changchun, Nanjing, Xian, Zhongshan, Foshan, Zhuhai, Suzhou, Ningbo, Chongqing, Hangzhou, Qingdao, Dalian, Shenyang, Tianjin, Jinan, Hong Kong and Macau. The Company is also engaged in other property-related businesses such as property investment, property management, construction design etc.

    At HK$ 15.34, the company's market cap is around US$ 16.2 billion, that is a P/E of 10.2 only and a P/E to Growth (NYSE:PEG) of only 0.60 .
    The stock is up 7.1% this year, trading between its 52w high and low of HK$17.9 and HK$ if HK$ 12.64
    Dividend yield is 1.76% only but with a growth rate of 31.3% over the past 5 years.

    Sustainability of dividends:
    Dividend payout ratio: 17.8% (i.e retained earnings:  82.2%)

    Market consensus:  4.34 / 5
    12 month target price: HK$ 17.98
    (source: bloomberg)

    4. Shenzhou International Group: (2313 HK) - HK$ 10.12
    The company is the the largest vertically integrated knitwear manufacturer in China with clients such as Nike, Adidas, Mizuno, Spalding...

    At HK$ 10.12, the company's market cap is around US$ 1.6 billion, that is a P/E of 8.27 and a P/E to growth of only 0.34.
    The stock is up 12.3% this year, trading near its 52w high of HK$ 11.2 .
    Dividend yield is 3.56% and Dividend growth rate for the past 5 years is 78.26%

    Sustainability of dividends:
    Dividend payout ratio: 30% (i.e retained earnings:  70%)

    Market consensus:  4.5 / 5
    12 month target price: HK$ 11.12
    (source: bloomberg)


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