Dividend payouts down but still lucrative

A total of 52 SET-listed companies out of 570 were unable to maintain dividend payments in 2020 as the pandemic hobbled their financial capacity.

The average dividend payment rate of the 518 companies was 1.5% in 2020 compared with 2.2% the previous year.

According to the Stock Exchange of Thailand’s statistics, the SET Index in April rose 3.01% from the previous month as investors flocked to high-dividend stocks in hopes of capital gains and high dividend yields.

The statistics suggest the price of stocks with high dividend payouts exceeded the average SET return.

Stock prices normally increase a month before the SET imposes the XD sign (excluding dividend) on the trade of these stocks, with an average price gain of 5%.

Moreover, Thai stocks hit an upside limit as the SET Index has risen nearly 10% from the beginning of this year.

Investment in high-dividend stocks during the next 1-2 months should improve returns, said Paradorn Tiaranapramot, assistant vice-president at Asia Plus Securities (ASPS).

ASPS picks for high-dividend stocks are Tisco Financial Group Plc (Tisco), SC Asset Corporation Plc (SC), and Sri Trang Gloves Thailand (STGT).

In 2020, Tisco, SC, and STGT returned dividend yields of 6.5%, 5.7%, and 5%, respectively.

ASPS executive vice-president Therdsak Thaveeteeratham said investors can invest in dividend stocks for the long term as most dividends come from companies with a consistent stream of income.

Investors should selectively invest in stocks that pay dividends of 4% or more with a moderate price-to-earnings ratio, he said. Interesting stocks for long-term portfolios include property funds, real estate investment trusts, infrastructure funds, stocks in the construction and building materials industry, and those related to power plants.

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