Thai dividend stocks outperform bank deposits

The quest for investments with steady returns in an era of global volatility and high interest rates has led many investors to gravitate towards dividend stocks. With the potential for yields exceeding 5% and a payout that can reach up to 20% yearly, these stocks offer a lucrative alternative to conventional bank deposits.

A study conducted by the Stock Exchange of Thailand (SET) reveals that the average dividend yield of listed Thai companies ranges from 1.25 to 2.25 times. This is significantly higher than the fixed deposit interest rate for 12 months, making dividend stocks a preferable option for long-term investment.

Last year, the 823 companies listed on the SET, despite a 2% decrease in total income from the previous year to 18.2 trillion baht, managed to generate a combined net profit of 947 billion baht. A noteworthy 76% of these companies, or approximately 625, reported net profits from their operations.

Among the listed companies, some golden goose stocks have provided consistent returns for investors. The Bangkok Post’s data compilation revealed that from 2017 to 2023, the dividend yield of these Thai companies was 1.25-2.25 times, surpassing the highest rate offered by commercial banks for 12-month fixed deposits.

The SET has been facilitating investment in dividend stocks by annually selecting a group of stocks for a dividend universe since 2016. Companies selected for this group have demonstrated good, continuous profits, liquidity in operations, and adherence to good corporate governance. Currently, 141 listed companies meet this criteria.

These dividend universe stocks have an average yearly dividend yield of 4.11%, a figure that is higher than the market average of 2.88%. Furthermore, 43 of these 141 companies have a five-year average dividend yield that exceeds 5% per year. The top 15 companies in this group have an average dividend yield ranging from 6.62% to 11.6%, with an average of 8% per year.

As of March 29, the top ten dividend yield stocks based on five-year averages include Sherwood Corporation (11.6%), Lohakit Metal (9.98%), Lanna Resources (9.83%), Pruksa Holding (9.09%), TPI Polene Power (7.87%), Phol Dhanya (7.65%), Sahamit Machinery (7.59%), Tisco Financial Group (7.47%), Namyong Terminal (7.37%) and MFC Asset Management (7.27%).

The SET High Dividend Index’s top 15 stocks have a three-year dividend yield ranging from 4.75% to 22.1%, with an average of 8.01% per year. The companies in this index include Sri Trang Gloves (Thailand) (22.1%), Regional Container Lines (16.5%), Sri Trang-Agro Industry (13.1%), Tipco Asphalt (7.56%), TISCO (7.18%), Land and Houses (6.03%), Supalai (5.78%), Original Property (5.77%) and Thai Union Group (5.05%), reported Bangkok Post.