What are the tips for investing in high dividend stocks
Under normal circumstances, a dividend rate of more than 6% is an ideal state, and investors can buy it. Of course, if the overall environment of the stock market is not good, you can wait until the stock price drops a little before buying, and the dividend rate will be higher.
Shareholding registration date must be mastered.
I often see investors asking questions on the Internet, when can they buy company stocks to enjoy dividends? Obviously, they don’t know much about the concept of equity registration date.
Under normal circumstances, listed companies will clearly inform the equity registration date and ex-dividend date in the announcement. For example, Riyue shares announced the implementation announcement of the 2021 annual equity distribution. This profit distribution plan is a cash dividend of 0.25 yuan (tax included) per A share. The equity registration date is July 28, 2022, and the ex-right (dividend) date is 2022 July 29th.
Shareholders who can enjoy dividends must be investors who bought stocks before the market close on the equity registration date. All ordinary shareholders of the company registered in the company (hereinafter referred to as “CSDC Shanghai Branch”).
The content of the announcement issued by the Bank of China shows that the 2021 dividend distribution targets include all A-share shareholders registered in the China Settlement Shanghai Branch as of the afternoon of July 14, 2022, after the Shanghai Stock Exchange closes. In other words, July 14th is the equity registration date of the Bank of China. Therefore, if you buy after the equity registration date, you will not be able to enjoy the dividends of the year, and you will only have the opportunity to wait until the next year. There is such a phenomenon in stocks that the stock price will “fall” after ex-dividend, that is, the stock price will also decrease correspondingly after dividends, which makes many investors doubt. Doesn’t a decrease in stock price after dividends mean no dividends
? For example, if you hold 10,000 shares of a certain stock, the stock price is 10 yuan, the total assets before dividends are 100,000 yuan, and the dividend ratio is 5 yuan for every 10 shares, then you can get 5,000 yuan. Dividends will be ex-dividend at the same time. It becomes 9.5 yuan. At this time, the total assets of the account are still 100,000 yuan, the stock assets are 95,000 yuan, and there is another 5,000 yuan in cash.
Listed companies will carry out ex-rights and ex-dividend operations after dividends are distributed, that is, the stock price will be lowered accordingly, so that the total assets of investors will remain unchanged. However, after dividends are paid, investors will have more cash in their stock accounts, or more stocks in their positions. Therefore, a decrease in stock price after dividends does not mean no dividends. The cash dividends of listed companies have indeed given out real money.
In fact, from the perspective of long-term trend, the stock price trend of high-dividend stocks is relatively stable, so through the annual fixed dividend, they can also obtain more reasonable returns. According to the statistical results of Dateeyes, China National Agricultural Bank of China and other major state-owned banks, in the past 10 years (from January 16, 2013 to January 16, 2023, no reinstatement), except for the rise in the stock price of China Construction Bank, other Share prices of the four banks were little changed. But in fact, because of the continuous large dividends, if you insist on holding the stocks of these large state-owned banks, you can get good returns. Take the Agricultural Bank of China as an example. In the past 10 years, the real money received per share was 1.78 yuan. If the dividends are continuously bought into stocks, the income is not bad.
Holding shares for more than one year is exempt from individual tax
. After enjoying the dividend, if you sell the stock soon, you need to pay a certain percentage of personal income tax.
In the dividend distribution announcements of various listed companies, investors can often see such a passage: For natural person shareholders and securities investment fund shareholders who hold the company’s common According to the relevant provisions of the “Notice of the Ministry of Finance [2015] No. 101) and the “Notice on Issues Concerning the Implementation of Differentiated Individual Income Tax Policies for Dividends of Listed Companies” (Cai Shui [2012] No. 85), the company will temporarily not Withholding personal income tax.
However, individual investors need to pay individual tax when they transfer their shares after the equity registration date and hold them for less than one year. Still taking Bank of China as an example, if investors choose to sell their stocks on July 16, 2022, China Settlement Shanghai Branch will calculate the actual tax payable based on the period of their shareholding, and securities companies and other share custodian institutions will withdraw from their personal fund accounts. Withhold and transfer to CSDC Shanghai Branch, CSDC Shanghai Branch transfers to Bank of China within 5 working days of the next month, and Bank of China declares and pays to the competent tax authority after receiving the tax.
The specific actual tax burden is: if the holding period is within 1 month (including 1 month), the dividends and bonuses are fully included in the taxable income, and the actual tax burden is 20%; if the holding period is more than 1 month 1 year (including 1 year), its dividends and bonuses are temporarily reduced to 50% of the taxable income, and the actual tax burden is 10%; if the holding period exceeds 1 year, its dividends and bonuses are temporarily exempt from personal income tax .
Pay attention to the timing of buying
Investing in high-dividend stocks also pays attention to the timing of buying.
Under normal circumstances, investing in high-dividend stocks is nothing more than considering enjoying a high proportion of dividends, so the main target can be aimed at stocks with relatively stable stock prices but high dividend yields. This requires that the company’s operation is relatively stable, and the cash flow is abundant, and it can implement stable dividends. In the A-share market, such companies are mainly concentrated in industries such as banking, home appliances, clothing, brewing, construction, and railway transportation.
There is another very critical factor in choosing an investment target, which is the stable growth of performance. Some companies currently have a relatively high dividend rate, but their business continuity is not good, so the possibility of continuing to pay high dividends in the future will decrease. For example, Yangyuan Beverage, a representative company in the food industry, has continued to pay a large amount of dividends since its listing, but its performance has shown signs of decline in recent years, and the future dividend rate is likely to decline.
As for the choice of buying time, it is also very particular. The best way is to buy at a position with a higher dividend rate. Dividend rate is one of the important yardsticks to measure whether a company has investment value. Typically, a high dividend yield indicates a high dividend payout. The higher the dividend rate, the stronger the company’s profitability, and the more profits shared by ordinary shareholders. Therefore, the higher the dividend rate, the better.
How to determine when to buy? The dividend rate level can be determined first. The calculation formula is: dividend rate = annual dividend per share/purchase stock price. For example, if you buy a stock with a stock price of 10 yuan, and the dividend per share has been stabilized at 0.8 yuan in the last three years, then the dividend rate (dividend rate) is 8%. Under normal circumstances, a dividend rate of more than 6% is an ideal state, and investors can buy it. Of course, if the overall environment of the stock market is not good, you can wait until the stock price drops a little before buying, so that the dividend rate you get will be higher.
