Benzinga - by Daniel Harrison, Benzinga Contributor.
This year marks the year of the big China stock sell-off: both the Hang Seng Index and China’s Shanghai Composite Index are well in the red. The iShares China Large Cap ETF (ARCA: FXI) is off 8% so far in 2023.
Hang Seng Indexes has made an index of the 50 companies with stellar dividend yields. Year-to-date, the Hang Seng Dividend Yield Index is down as for the rest of the market, by 10.5%.
Continued declines in Chinese stocks have led to speculation that the Chinese government will soon intervene to buy up stocks. If that happens, what are now unbeatable dividend yields may soon begin to vanish.
Of the 50 stocks in the Hang Seng Dividend Yield Index that are traded on US exchanges in addition to Chinese ones, the following six companies when equally-weighted in an investor’s portfolio yield an average dividend of 10.83% at today’s prices:
- Telco HKBN Ltd. (OTC: HKBF) is currently 40% lower year-to-date and yields the highest in the group of 6 stocks, with a dividend of 13.8%.
- China Shenhua Energy Company Limited (OTC: CSUAY) has remained flat all year, but this $82 billion power company is still paying today’s stock investors an 11.8% dividend yield.
- Guangdong Investment Limited (OTC: GGDVF) is a somewhat overlooked stock, being a smaller-sized hotel operator, property and infrastructure (mostly waterworks) investor. Guangdong’s shares offer today’s stock buyers an annual 10.8% dividend on their purchase.
- PCCW Limited (OTC: PCCW) is another smaller stock, with a market capitalization of just $3.9 billion, but like HKBN it is pretty much flat on the year. The company is paying investors a 10.15% dividend.
- Hysan Development Company Limited (OTC: HYSNY) has a healthy cashflow position and brighter prospects than most in the property space, according to Fitch Ratings. Hysan has been raising debt all year, which has led to a 42% reduction in its share price, so the company is now paying a 9.6% dividend.
- Despite the effects of slowing growth on the mainland, Bank of China Limited (OTC: BACHY) still remains China’s lender-of-first-choice for many consumers and businesses alike. That has meant its shares haven’t fared as badly as other companies in the financial sector have this year, falling just 4.5% so far in 2023. Even so, Bank of China is paying investors a 9.19% dividend.