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www.LegiEX.com is it good? The dividend season is coming, how to screen the company

With the official closing of the annual report season, 3,843 listed companies in the Shanghai and Shenzhen markets disclosed the 2019 annual report and main operating results as scheduled, showing all investors the operating results of the past year.

As a long-term return on the company's development, the listed company will launch a cash dividend plan to share the dividends of performance growth with investors.

Development of "Iron Rooster"

Cash dividends are one of the most basic systems in the capital market and an important way for listed companies to return investors.

However, for a long time in the past, cash dividends have always been a major problem faced by the A-share market. The market always has an overall environment of "heavy financing and low return", which makes some companies only care about the financing use of the capital market, but ignore The function of mutual benefit and win-win with small and medium-sized investors.

Since the beginning of listing, some companies have not made a national cash dividend. For example, Dadonghai A (000613), since its listing on the Shenzhen Stock Exchange in 1997, has not yet launched a dividend plan.

No less than 20 companies have been listed before 2000, and in the long history of the capital market for 20 years, there have been no initiatives to give back to investors. Because of their shortcomings, they were dubbed "iron cocks" in the capital market by investors.

Transformation of "Iron Rooster"

The continuous advocacy of the system and supervisory authorities for cash dividends has gradually achieved results. The awareness of dividends of listed companies has gradually increased, and the attitude of actively returning investors has become increasingly positive.

Moreover, unlike the digital games that listed companies liked to send high in the early years, listed companies are now more willing to pay real money to investors, just as many countries and regions paid money to the public for consumption during the outbreak. A cash red envelope was also issued to investors.

Among investors, investors are beginning to favor investing in high-dividend company stocks. Many investors even use dividends as a criterion to judge whether a company is worth investing, and use the dividend rate as one of the important measures of whether a company has investment value , Equating high dividend yields with stable business performance, strong profitability, and sufficient cash flow, triggering a benign effect of value investment.

Generally speaking, a high dividend yield is an important factor for attracting long-term funds, and it is the reference index that medium- and long-term value investors care about most. Long-term funds provide stable and continuous support for the development of listed companies.

Investors' general favor of high cash dividend companies is conducive to cultivating capital market value investment ideas, increasing the market's benign vitality, and helping to perfect the market-oriented cash dividend mechanism.

"Iron Rooster" Confusion

Just when investors were delighted to see that the "iron rooster" they had cultivated was gradually becoming a "money printing machine", some investors raised his confusion at the right time-after the company's stock cash dividends, it was necessary to remove the rights. After the ex-rights, the stock price is lowered, and the dividends are tax deducted.

And this part is originally his own investment income, and the original dividend is his own money! So, is this view correct?

In fact, correcting the purpose of stock investment, we can get the correct answer more clearly.

If you are only a speculator in the capital market, and you are interested in the price difference caused by short-term fluctuations in stock prices, then any behavior that causes a discount to the stock price is regarded as a damage to the value of the stock, and naturally the dividend money is regarded as itself Money.

However, if it is a value investor and is optimistic about the future development prospects of listed companies, the purpose of buying stocks of listed companies is to become shareholders of the company and share the dividends of future growth with the company. Gold and silver flowed out of the listed company ’s book and truly entered the investor ’s pocket. It is a normal move to remove the stock price. At this time, it is the company ’s assets that the investor holds the corresponding proportion of the shares. Is to share your own money.

Compared with short-term speculators who only see short-term fluctuations in stock prices, long-term holders ’stock value not only includes short-term fluctuations in spreads, but also obtains stable cash flow income from listed companies and obtains two sets of returns. The final profit share is higher than that of short-term investors.

Because of this, the market environment for cash dividends is firmly in line with the concept of guiding small and medium-sized investors to value investment, and it can bring long-term and stable returns to investors. It helps investors abandon the short-term speculative trading concept and work together with listed companies with peace of mind growing up.

"Iron Rooster" Position

Since high dividends are one of the performance of the company's overall strength, is it necessary to transform all the hairless "iron cocks" into squandering "money printing machines"?

It is necessary to rationally realize that the important way for listed companies to give back shareholders when cash dividends are paid, but they cannot blindly require listed companies to pay dividends. It is necessary to formulate a reasonable cash dividend plan in accordance with the actual development needs of the company.

Especially for growth companies, the company has missed an important window for strategic development due to excessive cash distribution, which is a bit of a gain.

Look at the cash dividend from both positive and negative aspects. On the one hand, cash dividends can allow investors to obtain stable investment returns and increase investor confidence;

But on the other hand, cash dividends will also reduce the company's cash flow and have a certain impact on the company's liquidity.

Therefore, if the company's development is at a mature stage and the capital demand for external expansion costs is gradually declining, it is the right time to propose a cash dividend for the listed company and strengthen the dividend return mechanism to the shareholders.

But if the company is currently in a period of rapid development, requiring the company to pay a high dividend at this time is undoubtedly an unnecessary damage to the company's cash flow, which is equivalent to exhaustion.

Especially under the pressure of emergencies such as the epidemic this year, it is absolutely understandable that listed companies will reduce the size of cash dividends in the future and retain bullets for the winter. It should not be blamed for the decline in dividends of listed companies overnight.

Of course, for listed companies, it is necessary to consider more fully when formulating cash dividend plans, to find an ideal balance between the expansion needs of enterprises and the trust of repurchase investors, and to fully protect the normal operation and long-term development of enterprises. The development of dividends should not affect the company's growth needs in order to meet the dividend requirements. After all, what investors value more is the company's long-term development potential.

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