Saturday, August 20, 2011

Top Yielding China Stocks

China's vice president Xi Jinping believes in the economic future of the United States, after meeting with vice-president Joe Biden. Other attendees at the meeting included executives of General Motors Co., Coca Cola Co., Caterpillar Inc., Bank of China Ltd., and Lenovo Group. But the big question is, do US investors have confidence in China?

Many investors willing to take a chance on investing in China stocks are picking ones that pay dividends, which can help to reduce risk by returning capital faster and may reduce volatility. There are plenty of bargains out there as China stocks have dropped significantly over the last few weeks. The iShares FTSE China 25 Index Fund (FXI) has dropped over 32% since August 1. has just updated its list of over a dozen China stocks that pay dividends with yields running as high as 6%.

As an example, PetroChina Co. Ltd. (PTR) has been paying dividends since 2000, and pays twice a year also, most recently in May and September. This producer of oil and natural gas has a forward price to earnings ratio of 7.8 and pays a yield of 4.2%.

Another China company with a long term track record of paying dividends is China Petroleum & Chemical Corp. (SNP), which has been paying semi-annually since 2001. This oil, gas, and chemical company has a forward PE of 5.1 and yields 4.2%.

The wireless telecom company, China Mobile Limited (CHL) trades at 10.6 times earnings and yields 3.9%. Dividends are paid twice a year.

For a free Excel database of over a dozen high yielding China stocks, which can be sorted and updated, go to Eight of the stocks have yields in excess of 2%.

Disclosure: Author did not own any of the above at the time the article was written.


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