Dividends paying: difference emotions

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Dividends are expectations of shareholders when investing in an enterprise. Photo: N.Hien.

However, while many investors are happy to receive "fresh money" dividends from enterprises, many people are holding back shares or even nothing from their own invested enterprises.

One of the leading companies on the stock market is Vinamilk Joint Stock Company (VNM) which always gives shareholders the satisfaction with high dividend payout ratio. In 2016, the company spent over 7,200 billion vnd in cash dividends with a rate of up to 60% for shareholders, of which 20% paid for the second phase of 2015 and 40% for the first phase of 2016. In addition, Vinamilk also spent 20% by shares due to raising capital from equity. The number of issued VNM bonus shares was up to 242 million. The face value is 2,420 billion vnd. However, if we calculated the value as in the market which was about 130,000 vnd per share, so these bonus shares are worth over 31,400 billion vnd. VNM's business results in 2016 were also impressive with net sales of 46,794 billion vnd, increased by nearly 17% compared to 2015; after-tax profit reached 9,364 billion vnd, an increase of 21% compared to 2015. Therefore, the forecast of dividend payment in 2016 of VNM will continue to be "huge".

Penny with "huge" dividends

Also so impressive is the penny stocks but the dividend rate is higher than the market price. Typically, Khanh Hoa Salt Joint Stock Company (KSC) has the current price of only 400 vnd per share. However, in 2016, the company paid dividend at 12%, equivalent to 1,200 vndper share. Similarly, MEINFA's dividend payout ratio (MEF) is up to 40%, equivalent to 4,000 vnd per share, while the market price is only 900 vnd per share. Recently, Vinh Packaging Company (VBC) has also distributed dividends to shareholders at the rate of 70% in cash. Previously, the dividend rate in 2015 of VBC was also at 50% in cash. Produce and Trading Metal Joint Stock Company (KKC) has just announced its resolution on dividend payment plan for 2016 at the rate of 50% in cash. This high dividend yield comes from KKC's positive business results in 2016 with after-tax profit of 38 billion vnd, equivalent to EPS of 8,000 vnd. Currently, KKC's trading price is only 16,400 vnd per share.

Recently, Transport Investment and Construction Consulting Joint Stock Company (TVG) also announced to pay dividends at the rate of 10%. It is worth noting that TVG's market price is only 500 vnd/unit. Thus, the dividend payment of 1,000 vnd/share is double the market price. Similarly, PhanThiet Garment Export Joint Stock Company also has a market value of only 700 vnd/unit, but the regular dividend payment rate remains at 10%. However, shares of these companies just have very few transactions because shareholders only want to keep these shares to enjoy annual dividends instead of following the risky waves in the market. Also, the prices of these stocks have always been stable for many years.

Notably, one of the "brightest stars" in this year's rate of dividends is the Da Nang Airport Service Joint Stock Company (MAS) with 80% cash. Earlier, in 2015, MAS also paid cash dividends up to 120%. With a charter capital of just over 30 billion vnd, MAS always achieves high efficiency in business. In 2016, MAS achieved 296 billion vnd in revenue, increased by 30% over the same period in 2015; after-tax profit reached nearly 45 billion vnd, up by 19%. Consequently, EPS (earnings per share) in 2016 was raise to nearly 14,500 vnd per share. Currently, MAS shares are traded at 106,000 vnd/share with P/E of 9.8, which is lower than the industry and market average, quite cheap compared with an effective enterprise with high paying dividends.

Late dividends paying

Meanwhile, due to inefficient business results or losses, many enterprises "say no dividend", even this situation lasted for many years in many companies.

Typically, Lilama 45.4 Joint Stock Company (L44) recently announced to postpone the dividend payment date of 2012 and 2013 in cash from 29/12/2016 through 29/12/2017. Explaining this, the leader of L44 said that the company is facing financial difficulties and they are checking and taking over also drawing the balancesheet of projects which are wasted time because of the prolonged project progress, late capital payback, and large amount of debt outstanding. Therefore, the company has not arranged the source of money to pay dividends to shareholders. Currently, L44 shares are priced at 1,900 vnd. Similarly, Song Da 9.06 Joint Stock Company (S96) has just announced a cash dividend payment in 2010 for one year from 31/12/2016. This is the fourth postponement of S96 for 2016 dividends and for the same reason that the money is not available. The current price of S96 is 700 vnd / unit.

10 highlights of Viet Nam stock market in 2016 VCN - Securities Journalists Club (SJC) has listed 10 highlights of the Stock market in 2016.

Many other companies choose to pay stock dividends to shareholders. Specifically, in the past two years, Rang Dong Plastic Company (RDP) used shares to pay dividends to shareholders. Similarly, there are some enterprises did the same method such as: TienThanh Trading and Service joint stock company (TTH), Ben Tre Pharmaceutical joint stock company (DBT) or other joint stock commercial banks. Observers noted that the payment of dividends by stock is becoming popular in recent years, even there are signs of abuse this method in some enterprises. According to experts' analysis on the days after dividends by shares were paid, the market will adjust a decrease corresponding to the share dividend payment ratio. Therefore, although the number of shares owned by investors has increased, the total value of assets before and after the event does not change. Meanwhile stock prices were uncertain about a new rise again and the selling is not simple.