S&P Pan Asia Dividend Aristocrats
Eoin Treacy's view Periods
of market turmoil often instil a new found respect for yield in equity investors.
This occasion has been no different. However, there is a clear difference between
companies that have high yields and those with a consistent record of increasing
their respective payouts. When we find companies that offer both, as well as
exposure to the global economy's growth engines, then the odds of having found
an attractive opportunity have increased considerably.
S&P
defines dividend aristocrats as companies which have a strong record of increasing
their dividends year after year. I have posted reviews of dividend aristocrats
for the USA, Europe and Canada on successive occasions over the last 18 months.
However, it was not previously possible to review the constituents the S&P
Pan Asia Dividend Aristocrats Index because they did not make this information
public. This has now changed and the constituent data is now freely available
via their site.
S&P define an S&P Pan Asia Dividend Aristocrat as a company which has
increased its dividend yield every year for the last seven. The list currently
includes companies from Japan, Australia, Hong Kong, Singapore, India, Indonesia
and Korea. The Index rallied impressively
from the early 2009 low and while it has lost momentum somewhat over the last
year, its reaction has so far been limited to a similar pullback to that posted
from late 2009 to mid 2010. It is now testing the area of the 200-day MA but
will need to rally emphatically from current levels to indicate a return to
medium-term demand dominance. Here is a chart
comparing the performance of the nominal and total return indices which highlights
the Index's 3.3% per annum yield.
Here is a table of the
Index constituents with their respective yields.
I last reviewed Australian shares in Comment of the Day on August
12th. Of the shares in the S&P Pan Asia Dividend Aristocrat Index, Coca-Cola
Amatil (6.16%) has bounced back best over the last two weeks. It needs to
hold above A$11 if the medium-term upside is to continue to be given the benefit
of the doubt. The majority of other shares have endured significant price deterioration
and evidence of support building will be required to confirm a return to demand
dominance.
In Hong
Kong, Cheung Kong Infrastructure is
becoming increasingly overextended relative to the 200-day MA but a clear downward
dynamic, held for more than a week or two, would be required to indicate supply
side dominance.
In Indonesia
Semen Gresik Persero (Building Materials)
has lost upward momentum but yields 3.31% and has held its progression of rising
lows. A sustained move to new high ground would be required to reassert the
medium-term uptrend.
Medium-term
downtrends are generally observable among the Indian constituents. ITC
(Agriculture) is an exception. It yields 2.19%, and remains in a consistent
medium-term uptrend where it has found support in the region of the 200-day
MA on successive occasions. Siemens India
(.57%) has a relatively similar pattern. While not dividend aristocrats Nestle
India and Hindustan Lever also exhibit
relatively consistent medium-term uptrends.
The Japanese
stock market has been a clear underperformer for much of the last three years.
However, upside leaders among the dividend aristocrats include Lawson
(Retail 3.96%), Kaken Pharm (3.27%),
KDDI (Telecoms 2.55%), Japan
Tobacco (2.02%), Nitori Corp (Retail
1.02%), and Uni-Charm Corp (Cosmetics
0.78%).
In Singapore Jardine Matheson has pulled
back sharply to test the 200-day MA where it has at least paused. A clear upward
dynamic would confirm more than temporary support at the current level.
In Taiwan,
Simplo Technology (Electronic Components
2.38%) has a similar pattern to Jardine Metheson above.