Increasing the dividend ratio is the result of the passive selection of bank stocks in the future.
In the past 10 years, the ROE of bank stocks has dropped from about 20% to 10%, and some are even lower than 10%.
What does that mean? That is, the capital efficiency of state-owned assets is getting lower and lower. Because of its own economic constraints, the bank’s net assets continue to increase year by year!
10% is a watershed. If the yield of state-owned assets is lower than 10%, it means that social capital cannot be used reasonably.
And now the net assets of the four major banks are still increasing… As a result, the ROE of state-owned assets will be lower and lower!
90% of the equity of the four major banks is in the hands of the state, which increases the dividend ratio, reduces the net assets, and improves the return on equity. It also helps boost bank valuations.
If Bank of China distributes 3 yuan for 10 shares, what will be the result? That means 10% dividend rate! Valuations will also be boosted!
It is impossible for the price-to-book ratio of bank stocks to return to zero, and the ROE of capital also has a bottleneck! If net worth keeps increasing, ROE will get lower and lower! As a result, banks will have a bunch of inefficient assets on their hands.
If there are more and more net assets and more and more ROE, the bank will increase the loan interest rate in order to guarantee the ROE, which is also detrimental to social production.
Therefore, increasing the dividend rate is an inevitable and passive choice for bank stocks.
This is not just banks, other state-owned enterprises have similar problems. Net assets continue to accumulate, and the company makes steady profits every year, but the proportion of dividends is low. This results in a mismatch between net assets and price-earnings ratios.
The only result is dividends… Let profits return to society to promote consumption and production! Improve the utilization of social capital! It will also help improve the valuation of state-owned enterprises.
This topic has 33 discussions in Snowball, click to view.
Snowball is an investor’s social network, and smart investors are here.
Click to download Snowball mobile client http://xueqiu.com/xz ]]>
This article is reproduced from: http://xueqiu.com/3421614130/220742209
This site is for inclusion only, and the copyright belongs to the original author.