To The Moon

Last week's US PCE inflation index beat unexpectedly, market is afraid of further tightening, with a longer period. We have discussed in Inflation expectation rises, is market donwside trend temporary?

Most central banks around the world are keeping raising interest rates, and the market risk-free rates in most economies are keeing up, which is now good news for stock market. On one hand, valuation of stocks would decrease, on the other hand, the required return rate of investors will increase.go up.

For stock investors, cash returns are mostly refers to dividend.

Large companies with high stable dividend, and strong cash flow are good choices in this cycle. Hong Kong market offers a lot.

Most of them are in financial, communication and real estate services sectors, while there are few companies in the corresponding technology, consumption and medical industries.

We have concluded, 

There are 99 Hong Kong stock companies with a market value of over HK $10 billion, a dividend yield of over 5% in the past 12 months and continuous dividend history, $MIDEA REAL EST(03990)$ has the highest dividend yield as 14.85%.

There are 149 Hong Kong stock companies with a market value of over HK $10 billion, dividends of over 3% in the past 12 months and a history of continuous dividends.

Data source: Wind

However, for most companies with dividend yields above 8%, the annualized return on stock prices is negligible, the return comes mostly from dividends.

Considering of the iquidity of Hong Kong stock market , Most companies with high dividend yield have low proportion of tradable shares, and most shareholders are stable investors with long-term holdings, so trading is not active.

Therefore, we concluded that,

Market value exceeds HK $100 billion, the dividend yield is greater than 3%, and there is a history of continuous dividends, there are 44 companies in total.

Most of the top rankings are banks,$CEB BANK(06818)$The dividend yield exceeds 10%, and has remained above 10% in the last three years. Others are$CITIC BANK(00998)$$MINSHENG BANK(01988)$$BANK OF CHINA(03988)$ etc.

Data source: Wind

It should be noted that among these companies with higher dividend yields, although the returns of different companies will be different in the short term, the time dimension will be lengthened, with 5 years and 10 years as journals, and most of them are the same as$HSI(HSI)$And$HSCEI(HSCEI)$Behave similarly.

Therefore, dividends (extra cash flow) means a lot.

Some investors take cash directly, while others choose to reinvest dividends, resulting in compound interest effect.

In the past 10 years, we have experienced a bull market in growth stocks. Many investors began to ignore these companies with high dividends. In the current tight environment, the overall returns (including dividends) of these companies will once again provide new investors with more choices.