In this article, we discuss 10 Hong Kong dividend stocks to buy now.
After a deep recession in the pandemic years, the Hong Kong economy was on its way to recovery in 2021. As a result of robust global demand, the country experienced a surge of 7.8% in economic expansion year over year in the first half of 2021, as well as 5.5% and 4.8% growth in the third and fourth quarters, respectively, owing to the containment of the COVID-19 pandemic locally. However, the economy did not recover to its pre-pandemic levels, given the restrictions on tourism during the period.
Hong Kong Economic Outlook 2022
After growing 6.4% in 2021, which was the quickest economic recovery witnessed since 2010, Hong Kong’s economy was still 2% below the 2018 level. Fitch Ratings slashed the GDP growth forecast for Hong Kong in 2022 to roughly 1.5%, down from 3.0%, given the Omicron headwinds. The economy is not expected to reach its 2018 position until at least 2023.
Impact of Russia/Ukraine War on Asia
The economic carnage wreaked by the Russia/Ukraine war is bound to spill into Asia, and the region will fall victim to higher commodity prices, supply chain challenges, and growing inflationary pressure which will impact businesses and customers alike. Russia is a major oil and gas exporter, and Western sanctions on the country will lead to rising energy prices in Asia.
Trinh Nguyen, a senior economist for Asia at Natixis in Hong Kong, noted that the crisis “looked negative but not catastrophic” for Asia. As the region is a primary oil importer, the war will directly result in lower consumer purchasing power as the public faces higher prices. Food prices will also rise in line with the generally higher inflation that will mire the region.
“We can overcome short-term challenges and move forward”
Paul Chan, the finance chief of Hong Kong, acknowledged that the first quarter of 2022 was rocky, with unemployment for the three months ending February 2022 rising to 4.5%. This was the highest unemployment statistic in five months, and it was a result of the COVID-19 restrictions in the country after the fifth wave of the virus hit with full force, and the retail and catering industries laid off workers. Additionally, growth in exports is also forecasted to decline.
The chief of finance attributed these headwinds to multiple internal and external causes, mainly the fifth Covid wave, European geopolitical tensions, rampant inflation, and the strained US-China relations. Chan noted that the economic recovery in 2021 was all but wiped out in the first quarter of 2022. However, he still reiterated “absolute and firm confidence” in Hong Kong’s economic outlook.
Paul Chan observed that adapting to the general economic trends will result in stability, and the near-term headwinds can be overcome if Hong Kong focuses its efforts on development and supporting mainland China. He stressed upon the importance of opening up the Hong Kong economy for cross-border travel with mainland China and the rest of the world, while still being mindful of the pandemic.
Cheap Valuations in Hong Kong Securities
In Asia, stock valuations reached a 23-month low at the end of February, and Hong Kong stocks were valued the cheapest in the region. The average price to earnings ratio for stocks dipped to 9.87 amid rising COVID-19 cases and geopolitical tensions. HSBC analyst Herald van der Linde, the head of equity strategy for the Asia Pacific region, noted that low valuations provide some support to Asian securities.
In this market environment, investors who usually flock to US stocks like Microsoft Corporation (NASDAQ:MSFT), Walmart Inc. (NYSE:WMT), and Amazon.com, Inc. (NASDAQ:AMZN), could benefit from diversifying their portfolios with Hong Kong stocks.
Our Methodology
We screened for Hong Kong stocks that pay dividends and are established companies in the region. We have mentioned the latest dividend payouts mentioned by the companies, as well as the dividend yields as of March 25.
Hong Kong Dividend Stocks to Buy Now
10. CLP Holdings Limited (HKSE:0002.HK)
Dividend Yield as of March 25: 4.06%
CLP Holdings Limited (HKSE:0002.HK) is also known as China Light and Power Company, Limited. It operates as an electric company headquartered in Kowloon, Hong Kong. CLP Holdings Limited (HKSE:0002.HK) is one of the major electricity providers in Hong Kong, and it extends its services to customers in Australia, India, China, Southeast Asia, and Taiwan.
In an earnings release on February 28, CLP Holdings Limited (HKSE:0002.HK) announced annual financial results for 2021. The company posted a GAAP EPS of HK$3.36. Revenue over the period increased 5.5% year-over-year, reaching HK$83.96 million.
The company declared a HK$1.21 dividend per share on February 28, which was paid on March 24, to shareholders of record on March 15. CLP Holdings Limited (HKSE:0002.HK) delivers a dividend yield of 4.06% as of March 25.
In addition to Microsoft Corporation (NASDAQ:MSFT), Walmart Inc. (NYSE:WMT), and Amazon.com, Inc. (NASDAQ:AMZN), CLP Holdings Limited (HKSE:0002.HK) is a notable security for portfolio diversification.
9. BOC Hong Kong (Holdings) Limited (HKSE:2388.HK)
Dividend Yield as of March 25: 4.34%
BOC Hong Kong (Holdings) Limited (HKSE:2388.HK) is one of the leading Chinese commercial banks offering financial services including retail banking, commercial banking, investment banking, mortgage loans, private banking, wealth management, credit cards, and insurance. BOC Hong Kong (Holdings) Limited (HKSE:2388.HK) operates separately from its parent company, the Bank of China.
The company provided fee reductions, waivers, and rebates to small and medium enterprises during COVID-19 crisis, in order to help lower their operating costs. BOC Hong Kong (Holdings) Limited (HKSE:2388.HK)’s dividend yield on March 25 came in at 4.34%.
8. CK Hutchison Holdings Limited (HKSE:0001.HK)
Dividend Yield as of March 25: 4.57%
CK Hutchison Holdings Limited (HKSE:0001.HK) is a Hong Kong-based multinational conglomerate corporation that specializes in retail, infrastructure, and telecommunications. The company operates in more than 50 countries, with subsidiaries including Hutchison Asia Telecom Group, Hutchison Telecommunications Hong Kong Holdings, Wind Tre, CK Infrastructure Holdings, and A.S. Watson Group.
On March 17, CK Hutchison Holdings Limited (HKSE:0001.HK) reported a $HK1.86 per share semi-annual dividend. The dividend will be paid on June 9, to shareholders of record May 26. The company delivers a dividend yield of 4.57% as of March 25.
7. Swire Pacific Limited (HKSE:0019.HK)
Dividend Yield as of March 25: 5.52%
Swire Pacific Limited (HKSE:0019.HK) is a Hong Kong and London-based conglomerate that owns several businesses in the Asia Pacific region, especially Hong Kong and China. Overseas operations are conducted across Australia, Papua New Guinea, East Africa, Sri Lanka, the United States, and the United Kingdom. Swire Pacific Limited (HKSE:0019.HK) operates a property empire.
On March 10, Swire Pacific Limited (HKSE:0019.HK) reported a FY21 GAAP EPS of HK$1.63. Revenue over the period gained 19.4% year-over-year, reaching HK$15.89 billion. The company also declared a cash dividend of HK$1.60, which is payable on May 6 to shareholders of record on April 8. The dividend is paid semi-annually.
6. The Bank of East Asia, Limited (HKSE:0023.HK)
Dividend Yield as of March 25: 5.91%
The Bank of East Asia, Limited (HKSE:0023.HK) operates as one of the leading independent local Hong Kong banks, providing consumer banking, corporate banking, investment banking, and private banking services. The Bank of East Asia, Limited (HKSE:0023.HK)’s overseas branches are located in Macau, Malaysia, Singapore, Taiwan, the United States, and the United Kingdom.
The Bank of East Asia, Limited (HKSE:0023.HK)’s dividend yield as of March 25 stands at 5.91%. The company’s semi-annual cash dividend of HK$0.35 was declared on February 24, and it is payable on April 7 to shareholders of record on March 14.
The revenue for 2021 came in at HK$15.8 billion, up from the 2020 revenue of HK$12.3 billion. The Bank of East Asia, Limited (HKSE:0023.HK)’s net income for 2021 was HK$5.27 billion, compared to HK$3.26 billion in the earlier year.
The Bank of East Asia, Limited (HKSE:0023.HK) is a significant income stock to diversify portfolios that typically consist of American securities like Microsoft Corporation (NASDAQ:MSFT), Walmart Inc. (NYSE:WMT), and Amazon.com, Inc. (NASDAQ:AMZN).
5. New World Development Company Limited (HKSE:0017.HK)
Dividend Yield as of March 25: 6.35%
New World Development Company Limited (HKSE:0017.HK) is a Hong Kong-based company that operates in multiple market sectors including real estate, hotels, infrastructure and services, general merchandise, and department stores. The company’s subsidiaries include NWS Holdings, New World Department Store China, and New World China Land.
On February 25, New World Development Company Limited (HKSE:0017.HK) declared a semi-annual cash dividend of HK$0.56. The dividend is payable on April 12, to shareholders of record on March 18. The stock yields 6.35% as of March 25.
4. CITIC Telecom International Holdings Limited (HKSE:1883.HK)
Dividend Yield as of March 25: 7.79%
CITIC Telecom International Holdings Limited (HKSE:1883.HK) is a Hong Kong-based telecommunications company that provides its services in the Asia Pacific and Macau. The company offers voice service, mobile SMS and data service, and operates as an internet service provider in the region.
The full-year revenue for 2021 came in at HK$9.4 billion, compared to HK$8.92 billion in 2020. The net income for 2021 exceeded $1 billion. On March 15, CITIC Telecom International Holdings Limited (HKSE:1883.HK) declared a HK$0.23 per share semi-annual dividend, which will be distributed on June 13 to shareholders of record on May 27.
3. China Jinmao Holdings Group Limited (HKSE:0817.HK)
Dividend Yield as of March 25: 11.16%
China Jinmao Holdings Group Limited (HKSE:0817.HK) is a Hong Kong-based public corporation that operates in the real estate sector. Its core operations are located in mainland China.
The stock yields 11.16% as of March 25. China Jinmao Holdings Group Limited (HKSE:0817.HK)’s recent semi-annual dividend of HK$0.12 was disclosed on August 24, which was paid on October 29.
2. Vtech Holdings Limited (HKSE:0303.HK)
Dividend Yield as of March 25: 12.49%
Vtech Holdings Limited (HKSE:0303.HK) is a Hong Kong-based company that operates in the electronics sector, providing e-learning products for pre-school students. The company operates in the Middle East, Africa, Europe, the Asia Pacific, Latin America, and North America.
The latest dividend announcement by Vtech Holdings Limited (HKSE:0303.HK) came on November 15, when the company declared a HK$1.32 per share semi-annual dividend. The dividend was distributed to shareholders on December 17. The stock yields 12.49% as of March 25.
1. Seazen Group Limited (HKSE:1030.HK)
Dividend Yield as of March 25: 13.25%
Seazen Group Limited (HKSE:1030.HK) is a Hong Kong-based company that develops and sells properties, invests in startups, and offers construction design consulting services. It is one of the top Hong Kong dividend stocks to invest in, yielding 13.25% as of March 25.
You can also take a look at 10 Mid-Cap Stocks Hedge Funds Are Talking About and 10 Undervalued Small-Cap Stocks to Buy Now.
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Disclosure: None. 10 Hong Kong Dividend Stocks to Buy Now is originally published on Insider Monkey.
