PSE to launch dividend yield index

The Philippine Stock Exchange is launching the dividend yield index within the first half as part of efforts to attract income seeking equity investors.

The new index will track the performance of high dividend paying listed corporations.

Companies distribute a portion of their profits as dividends, while retaining the remaining portion to reinvest in the business.

Data culled by the PSE showed that the amount of cash dividends paid out by public listed companies to common shareholders reached P402.18 billion last year, up 17.3 percent from the previous year. This translated to dividend yields of 2.58 percent.

Dividend yield is the ratio of dividend per share to price per share.
The cash dividends paid by 28 of the 30 main index members amounted to P57.58 billion, giving common shareholders a 1.72 percent dividend yield. According to the PSE, 108 of 276 PLCs gave out cash dividends last year compared with 105 of the 271 in 2020.

Among the six sectors in the PSE, financials had the largest dividend payout at P187.55 billion.

“With around 40 percent of PLCs giving out dividends to their common shareholders, we deemed it necessary to showcase companies that provide high dividend income to investors by coming up with a Dividend Yield Index,” said PSE president and CEO Ramon S. Monzon.

“The gradual reopening of the local economy allowed companies to generate better income, which resulted in bigger dividends for shareholders. We hope that earnings growth among PLCs continues to improve to ensure steady dividend income for stock market investors,” Monzon added.

Real Estate Investment Trusts AREIT, Inc., DDMP REIT, Filinvest REIT Corp., RL Commercial REIT and MREIT recorded an aggregate cash dividend payout of P5.77 billion, resulting in 2.16 percent dividend yield, even as three of the five REITs were only listed for an average of four months.

“REITs have become a preferred asset class among investors because of its dividend mandate. With more REITs expected to list this year, including non-property REITs, investors will have a wider selection of companies that can provide passive income,” Monzon said.

SOURCE: Bilyonaryo

Categories: dividends, index, psei, REIT