Let's talk about dividends,
It's pretty stable.
Just a few days ago, there was a flash crash for 2 days, and then it has been moving sideways, and it actually resisted Brother Xiao Yu's work, amazing~
01
Why are dividends so stable?
Let's take a look at the composition of the industry.
Coal and banks are the two major ones, each accounting for about 1/4 of the weight.
In the past period of time, the two industries have gone this way,
Coal continued to fall, but banks rose all the way, hedging the decline in coal, which led to the sideways trend of the dividend index.
Therefore, the key to where the dividend index will go is to look at the banks and coal.
02
Banks, if you look at the details, it is more complicated, but if you look at the whole, it is much simpler.
There is a saying that "banks are the mother of all industries", and as long as the economy is still developing, the scale and performance of the banking industry will also grow together.
Take the four major behaviors as an example,
Although it has not been welcomed for many years, its performance has continued to grow slowly.
In 2011, the total revenue of the four major banks was 1.58 trillion yuan, and in 2022, the total revenue will be 3.08 trillion yuan, with an annualized growth rate of 6.3%.
In 2011, the total profit of the four major banks was 623.7 billion yuan, and the total profit in 2022 will be 1.17 trillion yuan, with an annualized growth rate of 5.9%.
From 2011 to 2022, China's nominal GDP increased from 48.8 trillion yuan to 120 trillion yuan, with an annualized growth rate of 8.6%.
The dividend ratio is also quite stable,
After 2015, 30% of the year's profits were used as dividends every year, which was not much at all, not much at all, and extremely stable.
So, let's look at the market of bank stocks,
Although the overall trend has been sideways since 2017, PE has dropped from 8.8 times to 5.2 times.
The dividend yield also increased from 2.9% to 5.3% due to the increase in dividend amount.
If you look at the current valuation of the bank index,
The PE is 5.22 times, and the principal is recovered in 5 years by profit alone.
PB is 0.58 times, and a bank equity with a book value of 100 yuan can be bought for 58 yuan.
The dividend yield is 5.27%, which is more practical, and the money in hand depends on the bank's annual dividends, and the principal will be recovered in about 20 years.
If you don't consider the macro economy, as well as small probability events, and only calculate the financial accounts, the probability of buying a bank and earning 5% per year is still quite large~
03
Coal fluctuates greatly,
Take a look at the revenue and profit growth of the coal industry,
From 2012 to 2015, due to overcapacity, coal prices fell all the way from 850 yuan/ton to 350 yuan/ton, a drop of 59%.
Coal companies are also miserable,
revenue fell from 897.6 billion yuan to 567.4 billion yuan, a drop of 37%.
The performance has changed from "making 84.4 billion yuan" to "losing 5.8 billion yuan".
Then, in 2016, the supply-side reform was launched, and the coal industry eased up and started a double growth in revenue and profit.
However, this growth momentum seems to have peaked in 2022.
Look at this picture again,
The red line is the average price of coal, and the blue line is the EPS (earnings per share) of the coal industry.
It can be seen that the two basically fluctuate in the same direction, that is, the performance of the coal industry is closely related to the price of coal.
At the end of 2022, after the price of coal peaked, it fell from 1,429 yuan/ton to 958 yuan/ton, a drop of 33%.
The coal industry's EPS fell by 30% from 1.86 to 1.31.
Therefore, don't look at the performance of coal stocks in 2023, but the performance has actually been negative. In the words commonly used by fund managers, it is that "the high point of the industry boom may have passed".
Judging from several coal companies that have published their annual reports,
Revenue, the overall decline in 2023, a 4.8% decline, and performance, the overall decline, a 21.2% decline.
As for the prediction of when the price of coal will stop falling, I will not look at it.
Endgame thinking, look at this picture,
Visually, the average price of coal is about 700 yuan/ton, and the corresponding EPS is about 0.75.
Based on the EPS of 1.31 at the end of last year, the average review is about 40% lower.
Therefore, for the sake of conservatism, we will recalculate the financial returns of the coal industry at a 6% discount based on the latest situation.
ON
The current PE of the coal index is 10.28 times, and after a 6 discount on profits, the estimated PE is 17.13 times, exceeding the highest PE in the past five years.
PB
There is no need to discount this, the relationship between net assets and profits is not so close, and cyclical industries often use PB valuations.
At present, the PB of the coal industry is 1.62x, which is already double from the bottom (0.84x) and higher than the PB of the past 10 years for 90% of the time.
If it continues to rise, it will challenge the peak of the bull market in 2015 and the prosperous market of the five golden flowers in 2007-2009.
From a PB perspective, coal is already highly valued.
dividend yield,
In August last year, before the rise, the dividend yield of the coal index peaked at 10.79%.
Now it is 7.26%, assuming that the dividend rate remains unchanged and the performance is discounted by 6%, the dividend yield will become 4.36%.
Other words
According to the endgame thinking, if you use the average to calculate,
The actual PE of the coal index is 17.13 times, and the actual PB is 1.62 times, and the valuation is already on the high side.
But the dividend yield is still attractive, even if the performance is discounted by 6%, it is still 4.36%, and if the stock price falls in the future, it will be even higher.
04
Then you can have an overall positioning of the dividend index.
1) Growth/Value Style Switching
The green line is the excess return of growth relative to value, going up is growth outperforming value, and going down is value outperforming growth.
From 2019 to 2021, growth significantly outperformed value, and the core asset market.
From 2022 to February 5, 2024, it is the growth that significantly underperforms the value, and if you look at the amplitude, it is close to the limit of the bottom of 2018.
Therefore, since February 6, it has become a growth that continues to outperform the value, although it is not sure whether it is the starting point of a new round of style switching, but after continuing to outperform for 3 years, how much cost-effective advantage is there in the value relative to growth, this should be a question mark.
The other is the view of the Yellow Sea,
At the end of 2022, he judged:
"2022 is the first year of value outperformance growth, according to the principle of style alternation, the style of value outperformance growth will last for at least two years, and 2023 will be value outperformance growth. ”
In 2023, as he judged, the value will significantly outperform the growth.
But in the fourth quarter of 2023, he said:
"With the deep adjustment of the stock prices of high-quality consumer, financial and technology stocks, their long-term investment value has also been highlighted, and they will gradually increase their positions in a prudent manner."
also combined words and deeds, and bought Anjing Food (consumption) into the top ten heavy stocks.
2) Is it possible for dividends to fall in the short term?
Let's take a look at the rise and fall of several major industries in the dividend index.
Since 2022, coal has risen by 44.56%, banks have risen by 0.36%, transportation and steel have plummeted, and the dividend index has risen by 7.43%.
It can be said that the dividend index is completely brought up by coal.
Therefore, how coal goes is very important to the dividend index.
As I said earlier,
In terms of performance, the peak of coal performance has passed, and in terms of valuation, the valuation of the coal industry is also high, which is a risk point that must be paid attention to.
However, coal only accounts for 1/4 of the dividends, and if there is a pullback, it depends on whether other industries can hedge. In the past few days, banks have hedged off the pullback of coal, and the dividend index has traded sideways.
In addition, I look at congestion,
Although everyone is talking about dividends, the dividends have not been bad in the past few years, at best, they have earned individual stock dividends, an average of about 6% per year.
Therefore, the crowding of dividends is not very exaggerated, it is still at the bottom, and the potential selling pressure is not large, which is a good thing, and it is not easy to stampede like core assets and small-cap stocks.
and 3) the long-term value of the dividend
Putting aside the short-term ups and downs, just looking at the long-term value, the internal ecology of dividend assets is probably like this:
There is pressure on coal stock prices to revert to the mean, but banks and other sectors have the ability and may hedge against this risk.
In terms of dividend yield, banks don't have to worry, as long as there is no moth incident, the dividend yield of about 5% per year can be obtained.
Coal, the current dividend yield is 7.26%, the performance is 4.36% after a 6% discount, if the stock price falls in the future, the dividend yield can be even higher.
Looking at the dividend index as a whole,
The average dividend yield since its inception is 4%, and the average dividend yield over the past five years has been 5.7% due to the increase in the dividend ratio in recent years.
Since the dividends of banks and coal are guaranteed, it can also be considered that the dividends of the dividend index are guaranteed.
In terms of growth,
The institution has recognized the reality and has not given any growth. To buy dividends, you either eat dividends or do swings.
generally
1) If you only want to earn dividends, an average of 5%, the dividend index is likely to be satisfied, and the investor's price is to bear the fluctuation of the dividend index.
2) If it is for the purpose of allocation, you can also switch from value to growth appropriately, but you should pay attention to the rhythm, dividend assets are not crowded, there is no bubble, and there is a certain uncertainty in style switching.
As Huang Hai said:
The past two years have been a process of rebalancing the equity position of public funds from growth to value, although dividend assets have risen for two consecutive years, but they are not crowded.
Although he has begun to adjust his position, he is still optimistic about the performance of dividend assets in 2024.
Compare fund trends,
The trend of Wanjia Xinli and CSI Coal is still very close, and the Yellow Sea is still heavily stocked in coal~
Disclaimer: The content of this article is for informational purposes only and does not constitute investment advice