Ha Giang firm leads amidst high dividend payout ratios

Many companies announced the payment of dividends at high ratios at this shareholders' meeting season.

Ha Giang Mineral Mechanics Joint Stock Company (HGM) is now the company with the highest dividend payment ratio, which stands at 70 per cent. The shareholders' meeting also agreed on the ratio of 50 per cent for 2014.


Dam Sen Water Park (DSN), Ben Tre Aquaproduct Import and Export Joint Stock Company (ABT) and Vinh Plastics and Bags Jsc. (VBC) were also among those with high dividend payout ratios, ranging from 50 per cent to 60 per cent, for 2013.

Viet Nam Container Shipping Corporation (VSC) recently announced the payment of dividend at a ratio ranging between 20 and 30 per cent. The company's general shareholders assembly approved the turnover and after-tax profit target for this year, at VND785 billion ($37.3 million) and VND187.5 billion ($8.5 million) respectively.

Hoa Phat Group (HPG), giant steel maker, agreed to a dividend payout ratio of 30 per cent, half of which was in cash and half in shares.

Hoa Phat Group targeted a turnover of VND23 trillion ($1.09 billion) and VND2.2 trillion ($104.7 million) in after-tax profit in 2014, after reporting VND19.2 trillion ($914 million) in turnover and VND2.01 trillion ($95.7 million) in profit last year.

In this shareholders' meeting season, many companies decided to pay dividends in shares, besides cash or instead of cash, given the recovery of the stock market. Vietcombank (VCB) planned to pay dividend for 2013 at a ratio of 12 per cent in shares.

Besides Hoa Phat and Vietcombank, technology giant FPT Group (FPT) also paid dividends at 55 per cent for 2013, 30 per cent of which was in cash and 25 per cent in shares.

Investors prefer cash when the market is down. However, shares are preferred when the market rebounds as shareholders benefit when shares rise while companies can retain money – which would otherwise have been paid to shareholders – for expanding operation and businesses.