Another two of my income counters announced their results – HRnetGroup last evening and OCBC this morning.
HRnetGroup has a resilient year with revenue and net profit up slightly for the year. With that, they declared a final dividend of 1.87 cents, bringing the year’s dividend to 4 cents.
Being a relative new listed company, I think they are still experiencing how they reward shareholders. After only declaring final dividend for 2017 to 2020, an interim dividend was declared for FY2021 Q3. Then for FY2022, the interim dividend was declared for 1H results and it ends up that this is higher than the proposed final dividend. Coming from a shareholder’s perspective, it’s a bit confusing for me as it differs from my experience with other listed companies. This is generally what I experienced with other companies:
- The final dividend is the same or higher than interim dividend
- If the results is positive (similar or better than previous year), then the interim/final dividend will be the same or higher than previous year.
- Dividend is typically declared to the nearest 0.1 cent
To be honest I was expecting a 3.0 cents final dividend but my thinking is obviously not align to how the company is doing it. Nonetheless, looking at the full year results, I am satisfied with the 4.0 cents dividend. As for share buyback, I am not in favour as only 23.2% of the issued shares is held by public and unlike US, there is no tax advantage of share buyback over dividend for investor. Hence, I would rather the group just declare a higher dividend.
Going forward. there are reasons to be optimistic with China reopening and the group continuing their expansion in North Asia. I will be attending their webinar with regards to their results announcement at 4.00 pm later. I will provide an update if I hear any interesting information.
Similar to the other two banks, OCBC has benefitted for the higher interest rate and reported a record year with final dividend of 40 cents, 15 cents higher than previous year!
Based on the sharing by CEO, it does feel like there is more room for growth in the coming year. While Great Eastern reported a weaker performance, I am not unduly worried as it has been a really tough year for investment last year. I am sure the wealth management and insurance segments will give a boost to the group’s earning when the market is up again.
Based on the few First-to-Market Launches initiatives, it does look like they are working quite closely with the CPF Board. Not forgetting their current fixed deposit promotion for CPF. Personally, I think that’s quite a good move given that CPF is a huge pool!
Holding on to my stake
HRnetGroup and OCBC are likely to do well in the coming year and both also have a guidance of 50% dividend payout ratio, Hence, I am expecting similar or slightly higher dividend for next year.
I will continue to hold on to my current stake.