Shanghai Securities News｜Five Highlights in Dividend Distribution of SSE-listed Companies Signal Stronger Investability and Rate of Return

Edited and Translated from: Shanghai Securities News, www.cnstock.com

Positive changes are seen in dividend distribution of SSE-listed companies in recent years. In 2024, the Several Opinions on Strengthening Supervision, Preventing Risks and Promoting High-Quality Development of the Capital Market proposed to "strengthen the supervision of cash dividends of listed companies". A sense of putting investors first has been embraced from system design to investment atmosphere, resulting in an improvement in dividend payout in many aspects. Specifically, five highlights can been seen from SSE-listed companies in their dividend practice since 2021.

First, dividend paying companies take up a higher percentage. In 2023, the number of SSE-listed companies paying dividends hit a record high, reaching 1,703 with an aggregated amount of about 1.74 trillion yuan. From 2021 to 2023, among profitable companies that meet the legal conditions for paying dividends, the proportion of companies that distributed cash dividends increased from 81% to 95%, which reflects the shift in corporate governance and their awareness of investor return.

Second, consistent dividend distribution indicates higher investment value. In 2023, 1,258 SSE-listed companies paid dividends for the third year in a row, marking an increase of about 40% from three years ago, accounting for 55% of the total number of SSE-listed companies. Most SSE-listed companies have adopted the practice of stable and consistent dividend distribution. The dividend payout ratio of 805 companies exceeded 30% for three consecutive years, and that of 145 companies exceeded 50%. According to experts, stable dividend distribution is attractive to medium- and long-term investors. From 2022 to 2024, the number of companies that have announced their shareholder return plans in the upcoming three years grew steadily, some of which have committed to a high dividend payout ratio.

Third, the frequency and amount of interim dividends reached a new high. In 2024, the number and value of interim dividend payouts by SSE-listed companies surged significantly to 2.2 times and 1.2 times the sum of the previous three years respectively. 24 companies paid dividends multiple times in 2024. Dividend distribution before the Spring Festival has become a new trend. It is estimated that about 160 SSE-listed companies will distribute dividends before the Spring Festival of 2025, with a dividend payment amount of more than 300 billion yuan, accounting for nearly 90% of the dividend amount across the market during the same period.

Fourth, well-performing and leading companies show higher willingness in paying dividends. In 2024, companies for high-performing and industry-leading stocks showed strong inclination to high dividends. The interim dividend amount from SSE 50 and SSE 180 constituents in 2024 reached 364 billion yuan and 529.3 billion yuan respectively, accounting for 63% and 91% of the total dividends of SSE-listed companies. The total amount of interim dividends of banking, petroleum and petrochemical, communications and other industries was 412.316 billion yuan in 2024.

Fifth, dividends have become a cornerstone of value investment. Dividend yield has become an important indicator with the rise of value investment. 186 SSE-listed companies have recorded a dividend yield of no less than 3% for three consecutive years, mainly operating in banking, transportation, basic chemicals, petroleum and petrochemical, construction, medicine and biology and other sectors. 45 companies' dividend yield exceeded 5%. These 186 companies saw their stock price rise much higher than other SSE-listed companies during the same period. Investors are keen to see more companies with both growth and return prospects in the future to help form a virtuous circle of investment, dividends and development and promote the steady development of the capital market.

Excerpted from Shanghai Securities News, www.cnstock.com on January 22, 2025

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The above information is provided for reference purposes only and does not constitute investment advice.