As of August 23rd, over 300 A-share listed companies are planning to conduct mid-term dividends for the year 2024, with the number of dividend-paying companies reaching a historical high.

Recently, several listed companies will implement their dividend distributions, and the filling rights trend is worth looking forward to. Data Treasure has combed through the stock price movements before and after individual stock dividends over the past 20 years, teaching you how to grasp the filling rights trend from a big data perspective.

A-shares are implementing dividends intensively

The filling rights trend may be staged

In recent years, with China's continuous introduction of relevant policies, the dividend system has become more and more refined. Against this backdrop, the total amount of cash dividends in A-shares has set a new historical high.

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According to the Securities Times · Data Treasure statistics, the total amount of A-share cash dividend plans (annual report + interim report dividends, excluding special dividends) in 2023 is nearly 2.2 trillion yuan, setting a new historical high, nearly doubling the dividend total in 2017. A total of 3,866 listed companies across the market have issued cash dividend plans, also setting a historical high; the number of companies participating in dividends accounts for 73% of the total number of listed companies, which is at a historical high.

With the continuous increase in the total amount of cash dividends in A-shares and the increasing number of listed companies participating in dividends, the filling rights trend after stock rights and interest are deducted has attracted more and more attention from investors.

Filling rights refers to the situation where, after a stock completes a cash dividend and rights and interest are deducted, the market is optimistic about the company's prospects, providing support for the subsequent trend, and completely making up for the amount of dividend distribution per share in the rise of the stock price. In other words, if investors want to fully profit from the cash dividends of listed companies, they must simultaneously meet two conditions: holding the rights-inclusive stocks and the occurrence of the filling rights trend.

The filling rights stocks are soaring

Generally speaking, continuous cash dividends to a certain extent reflect the good quality and authenticity of the company's profitability, and also highlight the company's attention to shareholder interests. Moreover, cash dividends can reduce the absolute price of stocks under the expectation of unchanged corporate profit growth, increasing their liquidity and attractiveness to potential investors. The above factors all help the stock to gain continuous upward momentum after rights and interest are deducted, accelerating the expansion of the company's market value.At the same time, the stock price growth curve of "rights inclusion - ex-rights - rights filling - re-rights inclusion" also fits the investment pattern of long-term growth stocks in the A-share market, thus being favored by various funds. A-share listed companies also often complete the process from quantitative change to qualitative change in market value scale through such development routes.

Data shows that companies that have experienced the above cycle more than 20 times have a median stock price increase of 68.19% in the past 10 years; for individual stocks that have experienced 15-19 times, the median increase drops to 31.18%; for individual stocks that have experienced 10-14 times, the median increase continues to decline to 14.03%.

Taking Gree Electric Appliances as an example, the company's opening price on the first day of listing was 17.5 yuan per share, and the stock price on August 19 was 40.74 yuan per share, with a stock price increase of 132.8%; at the same time, Gree Electric Appliances has increased its total share capital from 75 million shares to 5.631 billion shares through nearly 20 cash dividends and several high dividend transfers, an increase of 74.09 times. Gree Electric Appliances has a high cash dividend, and in the past dividends, there have been a total of 5 times where 10 shares were paid 10 yuan (including tax), 3 times where 10 shares were paid 15 yuan (including tax), and 1 time where 10 shares were paid 30 yuan (including tax).

A similar situation is also seen with Yangtze River Hydropower. In the 20 years since its listing, Yangtze River Hydropower has maintained a tradition of cash dividends almost every year, and the company's 2023 annual profit distribution of 8.2 yuan per 10 shares (including tax) is currently being implemented. Compared with the initial listing period, the company's stock price has increased by 377.2%, and the total share capital has more than doubled.

Which type of company has a high probability of filling rights?

The focus of the rights filling market is the comparison between per-share dividends and stock price changes. Therefore, the dividend yield is the most intuitive measurement indicator. From the formula, the dividend yield = per-share dividend (pre-tax) / stock price, and the individual stock dividend yield will increase when the dividend increases or the stock price decreases. Due to the differences in investors' psychological acceptance of stock price changes, individual stocks with a lower dividend yield obviously have a higher probability of filling rights than those with a higher dividend yield.

Data shows that individual stocks with a dividend yield of less than 1% have a rights filling probability of up to 40% on T+0 day, a rights filling probability of over 70% on T+5 day, and a rights filling probability of 92.86% on T+250 day; in contrast, individual stocks with a dividend yield of more than 3% have a rights filling probability of less than 3% on T+0 day, a rights filling probability of 21.08% on T+5 day, and a rights filling probability of 44.47% on T+20 day.

In addition, whether to fill rights or not also shows a certain linear relationship with the dividend rate of individual stocks in statistics. Individual stocks with a dividend rate of less than 10% have a rights filling probability of 93.5% on T+250 day. As the dividend rate continues to rise, the probability of filling rights will continue to decline. Individual stocks with a dividend rate higher than 70% have a rights filling probability of 86.12% on T+250 day.

High dividend paying listed companies generally have lower ROE and slower revenue growth characteristics. These companies are often in the mature stage of the life cycle, with relatively low investment returns, mostly in stable industries such as public utilities, banks, and real estate.

For example, in the public utilities sector, Datang Power has an average cash dividend rate of 93.34% since its listing, Yangtze River Hydropower has an average dividend rate of 66.18%, and Huadian International has a dividend rate of 59.28%; in the banking sector, the representative "four major banks" of ICBC, ABC, BOC, and CCB all have an average cash dividend rate of more than 30%. These individual stocks are also considered by the market to be more stable and defensive stocks with lower volatility.High dividend-paying companies also have the characteristic of a longer time to fill the rights gap. Based on the statistics of dividend plans completed within T+250 days, the average time taken by individual stocks in the banking sector is the longest, at 43 days; the average time taken by individual stocks in the steel, transportation, real estate, and textile and apparel sectors is more than 20 days. Sectors with shorter times include computers, electronics, defense and military, and beauty care, with an average time of 10 days. Stocks in these sectors may have lower stock prices or be concentrated on market hotspots, making it relatively easier for the filling rights trend to emerge.

In addition to individual stocks and sector factors, in years when the overall performance of the A-share market is good, the frequency of individual stock filling rights trends will also be higher.

Multiple factors support the filling rights trend

The filling rights trend is not a certainty after a company's ex-rights and ex-dividend, but rather the result of the interaction of multiple elements inside and outside the market. Factors such as performance support, policy benefits, market hotspots, and capital attention can all increase the probability of a filling rights trend after a stock's ex-rights and ex-dividend.

If the expected stock price increase does not occur, investors will face the risk of incomplete realization of dividend income; if they obtain dividends through rights grabbing, they will face certain losses. Moreover, if investors sell dividend-paying stocks before holding them for a year, they will also have to pay a higher proportion of taxes.

Therefore, when participating in the filling rights trend, investors need to be wary of some listed companies with poor fundamentals using high dividends for hype. Whether high dividends are beneficial to the company's sustainable development and whether there is a possibility of short-term market capital speculation are issues that investors need to pay attention to.

A-shares have a high probability of long-term filling rights

For dividend-paying companies, investors should not buy stocks for short-term filling rights. On the one hand, there is the risk of higher taxes bringing transaction costs; on the other hand, the short-term filling rights probability in the secondary market is low, so there is also the risk of transaction losses. Especially for companies with high dividend rates and high dividend yields, their stock price fluctuations are small, and the difficulty of filling rights is great, and the short-term trading risk is often higher.

It should also be pointed out that from a medium-term perspective, the probability of listed companies' dividends filling rights is very high. Even for companies with high dividend yields, the success rate of filling rights within T+250 days is close to 79%, which means that investors are likely to realize investment returns through dividend filling rights.

In the long run, for investors, the most ideal situation is when listed companies pay dividends multiple times, continuously fill rights, and the stock price continues to rise. This means that investors can not only obtain dividend returns but also obtain considerable premium returns in the secondary market."Triple High Company" Low Volatility and Steady Returns

From a frequency perspective, individual stocks with more dividend distributions tend to have a lower short-term filling rights success rate, with only about 20% of them successfully filling the gap on the ex-dividend date, which is below the average level. However, the key point is that the long-term stock price performance of such stocks is very good, indicating that stocks with continuous dividends are highly likely to achieve long-term stock price increases, and investors holding them long-term can realize steady dividend income and stock appreciation income.

Statistical analysis of dividend distributions reveals that the more dividends a stock pays, the more considerable its long-term returns are likely to be. Data shows that over the past 20 years, the median change in stock prices for individual stocks with a cumulative dividend distribution of 20 times or more is close to 56%; for those with 15 to 19 dividends, the median change is 34.18%; for those with 10 to 14 dividends, the median change is 9.46%; for those with 9 dividends or less, the median change is nearly -20%; and for stocks that have never paid dividends (excluding newly listed stocks in the last year), the median change is -43%.

However, to achieve good long-term returns from such stocks, investors need to be patient and endure the torment of low volatility. Data indicates that individual stocks with more than 20 dividends over the past 20 years generally have lower average daily fluctuation and turnover rates over the past 10 years.

These companies exhibit the characteristics of "low volatility and steady returns" in the secondary market, with dividend assets being more prominent, and their fundamentals are characterized by high-frequency dividends, high dividend payout ratios, and high ROE, known as the "Triple High" features.

Data shows that companies with more than 20 dividends over the past 10 years have an average dividend payout ratio close to 36%, which is nearly 12 percentage points higher than the average for companies with 9 or fewer dividends. In terms of profitability, the median ROE of companies with more than 20 dividends over the past 10 years has reached 8.39%, also at a relatively high level; in terms of valuation, companies with higher dividend frequencies have relatively lower price-to-earnings ratios, with the median P/E ratio of companies with more than 20 dividends over the past 10 years being the lowest.

Unveiling the Potential of High Dividend Companies

In summary, companies with high-frequency dividends, high dividend payout ratios, and sustained high ROE often possess the characteristics of "low volatility and steady returns." Data Treasure has compiled a list of publicly listed companies that plan to continue high dividends over the next three years, and holding stocks of such companies is likely to achieve a "steady happiness."

Data Treasure has exclusively sorted out the publicly listed companies that have published shareholder return plans for 2024-2026, with a total of 9 companies maintaining a dividend payout ratio of over 50% for the next three years, and more than 60 companies with a minimum dividend payout ratio between 30% and 40%.Among them, the highest dividend payout ratio is Kweichow Moutai, with a minimum dividend payout ratio of no less than 75% for the next three years; Yue Expressway A ranks second, the company announced in March that, under the premise of cash being able to meet the company's continuous operation and long-term development, if there are no significant investment plans or major cash expenditures, the company should distribute dividends in cash every year, and the cash dividends distributed for the years 2024-2026 should meet the condition of "the profit distributed in cash each year should not be less than 70% of the net profit attributable to the parent company in the consolidated statement of the current year."

In addition, the announcement by Seal Technology in June shows that when the cash dividend conditions are met, the company adopts a fixed ratio policy for cash dividends, and the profit distributed in cash dividends each year should not be less than 60% of the distributable profit realized that year; Di Su Fashion announced that the profit distributed to shareholders in cash each year should not be less than 60% of the net profit realized that year, and the specific dividend ratio is determined based on factors such as the company's cash flow, financial condition, future development plan, and whether there are major capital expenditure arrangements.

The nine companies with a dividend payout ratio of more than 50% for the next three years have all performed well in dividend distribution over the past three years, which also indirectly confirms that their shareholder return plans can be implemented. Among them, eight companies have a cumulative dividend payout ratio higher than 120%, that is, the total dividend amount (annual cumulative dividend amount) / the arithmetic average of the net profit attributable to the parent company in the annual report for the last three years exceeds 120% (including buybacks).

According to the institutional consensus forecast of this year's earnings per share, the minimum dividend payout ratio of the shareholder return plan, and the closing price on August 19, the latest dividend yield of the above nine stocks is generally high. Among them, Ganyuan Food is forecasted by institutions to have an earnings per share of 4.18 yuan this year, and according to the highest dividend payout ratio of 70% (the company's return plan dividend payout ratio is 50% to 70%), the dividend per share in 2024 will reach 2.93 yuan, and with the closing price of 49.58 yuan per share on August 19, the dividend yield is close to 6%. In addition, the dividend yield of Yue Expressway A exceeds 5%, and the dividend yields of stocks such as Tu Baby and Op Technology all exceed 4%, while the dividend yields of stocks such as Kweichow Moutai and Yuanli Shares all exceed 3%.