To The Moon

$BANK OF CHINA(03988)$

hi tiger brothers and sisters, most people would focus on s-REITs for their dividend portfolio to generate 5-6% dividend annually. With rising inflation and interest rate, are you still satisfied with 5-6% dividend or will you explore more attractive options?? 

$BANK OF CHINA(03988)$ can generate higher dividend return (9% at current price). I'm sure most of you would have seen their branches in some of the local shopping malls. They currently have 10 branches locally and you were to look at their generated net income and EPS over the last few years, you can see that it's on a uptrend and growing steadily.

It is important to see the bigger picture and understand that China is currently the wealthiest country. Despite all the other countries might be facing contracting economy, China on the other hand is still growing amid at a more modest rate and has one of the lowest inflation rate (2+%) in current environment.

Of course, the most important factor for long-term dividend play is whether the dividend payout is sustainable. It's currently only paying 31.5% of its net profit as dividend, hence it is likely to be sustainable over the long-run. With increasing population and wealth in China, will the business continue to improve??

Next important factor is the power of compounding, let's compare $10,000 growing over a period of 10 years at 5% vs 9%.

$10,000 5% over 10 years = $16,289 (62.9% gain)

$10,000 9% over 10 years =$23,638 (136.4% gain)

Now it's even more attractive at its ex-dividend price, would you take a little more risk and add a small portion to China banks? Do let me know your opinion!