"Choosing bank stocks should take the dividend yield as an important indicator, but not as the only indicator."
"It's better to buy bank shares than financial management?" Recently, some bank financial products fell below the net value, and investors turned to bank stocks with relatively stable dividends and high dividend yield. But can holding stocks with high dividend yield really make money?
"Since last year, the yield of bank financial management is mostly lower than 3.5%. The same money is not as good as buying bank shares. The dividend yield is high. In case of rising stock prices, you can make a small profit and buy again when the stock prices fall." When many people are still hesitant, Mr. Zhang has been buying bank shares on a large scale since last year to earn dividend income. He told the 21st Century Business Herald that if the stock price is appropriate in the future, he will still firmly buy bank shares.
It must be admitted that stocks are high-risk investment products, and a little carelessness will bring unpredictable losses. Buy bank financial management or investment banking stocks? There are different opinions in the market.
bank dividend rate vs wealth management income
Since 2022, the bank financial management, which has been considered as a prudent investment, began to fall below the net value. China financial network shows that as of March 23, among the 8511 surviving financial products issued by bank financial subsidiaries, 1472 had a cumulative net value of less than 1, except for products with an undisclosed net value.
According to the analysis of Dong Cuihua, a researcher at Puyi standard, the net value of financial products has broken recently. On the one hand, due to the expected reduction of reserve requirements and interest rates and the impact of the decline of stock market, the bond market as a whole has experienced obvious shocks, and the yields of bonds and non-standard assets have decreased; On the other hand, since the beginning of this year, affected by many factors such as the complex international situation, the stock market once fell sharply, and the yield of equity assets allocated in financial products also fell.
With the implementation of the new regulations on asset management, the bank's financial management business officially returned to the origin of "entrusted and customer financing", which fundamentally broke the expectation of "rigid cashing". According to the annual report of Bank Of China Limited(601988) financial management market (2021) released by the banking financial management registration and custody center on February 26, since the release of the new regulations on asset management, financial products have created a cumulative income of 3.61 trillion yuan for investors, including nearly 1 trillion yuan for investors in 2021. In each month of 2021, the weighted average annualized rate of return of financial products is the highest of 3.97% and the lowest of 2.29%. The fluctuation of rate of return is relatively stable.
Sealand Securities Co.Ltd(000750) chief analyst Yang Renwen pointed out in the research report that the long-term downward trend of bank financial management yield has not changed. In 2021, the weighted rate of return of financial products fluctuated in the range of 3% ~ 4%, and the fluctuation of rate of return was relatively stable. However, in the long run, the yield of financial products continued to decline in 2021, with a weighted average annualized yield of 3.55%, down 34bp from the previous year With the completion of the transformation process of net worth of bank financial management and the normalization of "breaking the net" of financial products, there is still room for decline in the yield of bank financial management in the future.
Previously, certificates of deposit were also one of the common choices of investors. In June 2021, the central bank optimized the supervision of deposit interest rate, and the self regulatory upper limit of deposit interest rate was changed from "formed by a certain multiple of deposit benchmark interest rate" to "determined by adding points to deposit benchmark interest rate". Based on this, the long-term interest rate of certificates of deposit began to decline. According to the data of rong360 Digital Technology Research Institute, the average interest rates of three-month and six-month certificates of deposit newly issued in February 2022 are 1.866% and 2.064% respectively; The average interest rates of 1-year, 2-year, 3-year and 5-year are 2.283%, 2.869%, 3.533% and 3.986% respectively.
Investors continue to find a way out of the long-term decline in financial management, and the deposit rate continues to fall.
Bank stocks with high dividend yield become an option. Dividend yield refers to the ratio of dividend to stock price at the time of purchase. This index is a simplified way of investment return. According to the data, based on the share price on March 22, among the 42 A-share listed banks in the past year, 7 banks have a dividend rate of more than 6%, 14 banks have a dividend rate of 4% ~ 6%, and 10 banks have a dividend rate of 3% ~ 4%.
We take Bank Of Beijing Co.Ltd(601169) as an example to compare the income gap between bank stocks and bank financial management The dividend yield of Bank Of Beijing Co.Ltd(601169) 6772% is calculated according to the closing price of 4.43 yuan on March 22. If you buy 100 hands at this price, you need to invest 44300 yuan and the income is 299996 yuan. Assuming that the Bank Of Beijing Co.Ltd(601169) dividend rate and the number of shares held remain unchanged in the future, the return in 14.76 years can be repaid, and the total return in 15 years is 45000 yuan.
In contrast, if 44300 yuan is used to buy financial products, the annual return is 157265 yuan according to the weighted average annualized rate of return of 3.55% in 2021; If you buy certificates of deposit, the one-year income is 1011369 yuan calculated according to the 1-year average interest rate of 2.283% in February 2022, but in fact, 44200 yuan does not meet the threshold of certificates of deposit, and the actual income may be lower.
China Construction Bank Corporation(601939) chairman Tian Guoli said, "from the perspective of ups and downs, large bank stocks are not suitable for short-term, but in the long run, the dividend rate of banks has been far higher than financial products, and there are still opportunities to make profits after holding them."
To sum up, is it a better choice to expect bank stock dividends than bank financial management? In an interview with the 21st Century Business Herald reporter, the president of beta Research Institute said that bank financial management and bank stocks are completely different assets. Most financial products belong to low-risk investment, and the underlying asset allocation is fixed income products, such as bonds, inter-bank notes, etc. Even if the withdrawal is relatively controllable, it will lead to a net break. If you buy bank shares, it is a high-risk investment, and the withdrawal range of share price is relatively uncontrollable. Investors should first understand their risk tolerance and choose the corresponding investment target.
dividend yield is not the only index for stock selection
It should be noted that the dividend yield is not a fixed value or invariable. According to the calculation formula, the dividend yield is the ratio of the dividend to the stock price at the time of purchase. When investors buy, the stock price is different, the dividend yield will change, and the income will be different.
Still take Bank Of Beijing Co.Ltd(601169) as an example. If it is bought at the closing price of 4.68 yuan on February 11, the highest point in the near future, according to the dividend distribution in 2020, the dividend yield of Bank Of Beijing Co.Ltd(601169) will be reduced to 6.4103%. At this time, if the same investment is 44300 yuan, the yield will be reduced to 28397629 yuan, which means that the yield per 100 hands will be reduced by about 160 yuan. Assuming that Bank Of Beijing Co.Ltd(601169) dividend yield and number of shares held remain unchanged in the future, the time required to recover the capital by relying on income will increase to 15.60 years, which is 1 year longer than that when buying with 4.43 yuan.
It is not difficult to find that stock price is an important factor affecting dividend yield. When the dividend situation remains unchanged, the higher the holding cost of the same stock, the lower the dividend yield, and the lower the return of the same invested capital.
It is worth mentioning that the change of dividend rate only represents the impact on income. Stock investment also needs to pay attention to the change of cost. The rise and fall of stock price directly affects the profit and loss of investment cost, and the change range may exceed the income change brought by dividend rate.
According to the analysis of the president of beta Research Institute, the dividend rate is based on the premise that banks can continue to pay dividends according to this level. If the selected banks are unable to continue to pay dividends due to risk events, they may suffer a double blow from the decline of share price and the suspension of dividends. In addition, the optional period of financial products is relatively flexible, mostly ranging from one month to several years. However, for dividend distribution, only if the holding period exceeds 1 year, the dividend income can be temporarily exempted from personal income tax. If the holding period is 1 month to 1 year, the tax burden is 10%; If the shareholding is less than one month, the tax burden is 20%. If the holding time is too short, the dividend will be greatly reduced.
Taking Bank Of Beijing Co.Ltd(601169) as an example, when investors bought 100 Bank Of Beijing Co.Ltd(601169) at the closing price of 4.68 yuan on February 11, the cost of investment was 46800 yuan, and the dividend yield was 6.4103% and 3 Shenzhen Zhongheng Huafa Co.Ltd(000020) 4 yuan still calculated according to the performance dividend distribution in 2020. If the share price falls to a low of 4.25 yuan the next day, the market value of the position will change from 46800 yuan to 42500 yuan, with a loss of 4300 yuan. Taking into account the dividend income, the overall performance may be a loss. Of course, this is only a hypothetical situation, which has nothing to do with a specific bank, but to illustrate the impact of stock price changes on earnings.
It is common for stock prices to rise and fall, and the market is unpredictable. You need to be extra cautious when investing in the market. Since March, bank stocks have generally been under pressure, and about 80% of the bank's stock market net profit ratio (PB) is less than 1, at an all-time low. Yang Haiping, a researcher at the Institute of securities and futures of the Central University of Finance and economics and general manager of the research and Development Department of the Bank of Inner Mongolia, believes that "the recent low Pb reflects the market's concern about the profitability of banks under the pressure of stable growth and reducing financing costs, as well as the market's concern about bank risks under the impact of uncertainty."
However, market analysts are still optimistic about the banking sector China Industrial Securities Co.Ltd(601377) analyst Chen Shaoxing said that at present, the overall valuation of the banking industry is still at a historical low, the current steady growth policy is actively implemented, and the monetary policy continues to exert force, which is conducive to the stability of macroeconomic growth expectations. The follow-up policies are expected to make further efforts in the direction of stable aggregate and excellent structure. Continue to be actively optimistic about the valuation repair market of the banking sector under the background of steady growth.
Tian Guoli said at the press conference of the State Council Information Office: "To be exact, after the subprime mortgage crisis in 2008, the business model of traditional commercial banks has become less and less favored by investors. The past glory has not reappeared, and the price to book ratio has changed from more than twice to less than one time. In this case, China is very closely connected with the world, and finance is a Borderless Business in a sense. At present, the average price to book ratio of A-Shares of Chinese banks is basically 0.66 times, and that of H shares is 0.47 times, which is higher than 0.44 in Japan and lower than that in Japan 0.72 in Europe and 1.42 times in the United States. Therefore, in fact, these are problems of traditional financial cognition. In terms of investment itself, I think it is still cost-effective. "
"Choosing bank stocks should take the dividend yield as an important indicator, but not as the only indicator." Yang Haiping told the 21st Century Business Herald that if you only look at the dividend rate, you may miss high-quality bank stocks. I suggest that you can also focus on the following aspects when choosing bank stocks. In terms of quantitative indicators, one is to judge the asset quality through the change trend of non-performing loan ratio and the proportion of restructured loans. Second, we should focus on judging its profitability through roe, net interest margin and revenue growth. In terms of qualitative judgment, it focuses on and evaluates its corporate governance, strategic ability and effective digital ability.
On the choice of bank financial management and bank stocks, the president of beta Research Institute warned that in conclusion, due to the essential differences between stocks and bank financial management in asset categories, investors need to consider various factors such as their own risk appetite and position duration, and don't blindly follow the trend.
