High-yield stocks have always been the top choice sought after by many investors, particularly in Hong Kong. But why are they so popular?  Today we will deep dive into how to evaluate these stocks and make smart investment decisions.  Firstly, there are  two main reasons for the popularity of high dividend stocks:

1) Offer investors regular ‘income’: Companies that generate  healthy profit generally redistribute a portion of these earnings back to their stockholders in the form of dividends. Most dividend stocks pay investors a set amount each quarter and the top ones may even increase the payout over time.

2) More ‘stable’ stocks: Generally speaking, well-established and reputable companies are the ones that tend to pay dividends. Larger companies that have a national reputation for reliability and delivering great results despite market volatility (known as Blue chip companies) are popular for the stability they offer. .

But let us examine further, do high dividend stocks actually perform as well as people think? What are the highest paying dividend stocks in Hong Kong? Are there things investors should watch out for when investing into such stocks? Read on as  AQUMON tackles these questions one by one!

 

Hong Kong’s Top Dividend Paying Stocks

Let’s get straight to the point of which stock has the highest payout in Hong Kong right now! When it comes to high-yield stocks, many people will think of the larger blue chip stocks that are likely included in the Hang Seng Index. Here we present the highest paying dividend stocks on the Hang Seng Index (as of Sep 30th 2021): 

 

As you can see the majority of these stocks  come from banks or property firms; these are largely seen asy more stable ‘cash rich’ companies, which can afford to pay higher dividends, known as  “yield” to their investors.

A stock's “yield” is expressed as a percentage and shows how much a company pays out in dividends each year relative to its stock price. It can loosely be understood as an investment's forward-looking expectation of return. However,  investors need to be careful because these dividend payouts can be cut or changed, in other words they are not 100% guaranteed.

 

So,  do high dividendstocks equate to high performing stocks? 

Can’t investors just pick the top dividend paying stocks and hold them for the long run, they should be sitting pretty and paying out regularly, right? Well, this is where it gets a little tricky. Let’s look at the same Top 10 HK dividend paying stocks  on year to date performance versus the Hang Seng Index:

Here we can see that if we average out the top 10 dividend stocks’ performance in 2021 it would be -4.64%, which is an outperformance of the HSI by +0.4%. In addition, you can see a large range in return performance(some as high as 11% like Sinopec Corp but others as low as Country Garden at -25%) so not all high dividend paying stocks are created equal.

 

Then how should investors approach dividend investing?

Investors should not just blindly pick stocks because they pay the highest dividends,instead one should also consider stocks that may offer slightly lower dividends but have good fundamentals and a consistent dividend payout track record.

Furthermore, as mentioned above, dividends payouts do change, which will impact the return potential of their stocks. So it makes sense to periodically adjust the high dividend stocks you invest into.  

But who has time to monitor the markets that often? We’ve got just the solution for you at AQUMON

 

Sit back and enjoy AQUMON’s High Dividends portfolio

At AQUMON, we’ve developed a smart stock portfolio that selects top quality  high yielding Hong Kong stocks called “High Dividends”. Through AQUMON’s smart algorithm-based approach, we offer investors access to a combination of  high dividend paying Hong Kong stocks that also have strong fundamentals. This means better long term performance along with improved stability. So far since the portfolio launched in 2021, we’ve seen “High Dividends” portfolio outperform the Hang Seng Index by +11.27% (as of Sep 26th 2021). 

When looking at the “High Dividends” top 5 invested stocks, you can see that our algorithms not only selected high yielding Hong Kong stocks but the companies themselves have shown solid performance so far in 2021:

 

The portfolio also diversifies risks by investing evenly across multiple sectors:

Researching and considering all these factors: high yields, diversified industries, and strong company fundamentals, can now be done with a simple click of a button with AQUMON.  We automatically track and adjust your portfolio, so you can go on with your day hassle-free! Hope you enjoyed our guide and learned more about investing in high dividend stocks! 

 

 

 

 

 

About us

AQUMON is a Hong Kong based award-winning financial technology company. Our mission is to leverage smart technology to make next-generation investment services affordable, transparent and accessible to both institutional clients and the general public. Through its proprietary algorithms and scalable, technical infrastructure, AQUMON’s automated platform empowers anyone to invest and maximise their returns. AQUMON has partnered with more than 100 financial institutions in Hong Kong and beyond, including AIA, CMB Wing Lung Bank, ChinaAMC, and Guangzhou Rural Commercial Bank. Hong Kong University of Science and Technology, the Alibaba Entrepreneurs Fund, affiliate of BOC International Holdings Limited, Zheng He Capital Management and Cyberport are among AQUMON's investors. 

 

The brand is held under Magnum Research Limited and is licensed with Type 1, 4 and 9 under the Securities and Futures Commission (SFC) of Hong Kong. AQUMON is also licensed by the U.S. Securities and Exchange Commission (SEC) and the Asset Management Association of China (AMAC).

 

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