Krungsri Capital Securities (KCS) is recommending investors opt for 11 high-dividend (HD) stocks which provide dividend yields of more than 2% per year in the first two months of each year to cash in on higher capital gains from their investment.
HD stocks tend to outperform the overall Stock Exchange of Thailand (SET) every January and February, as the market anticipates that these companies will continue to offer a high dividend payment for the annual operating results of the previous year.
Based on a KCS study, stocks in the SETHD group over the past decade have paid dividends either once or twice a year. Overall, SETHD stocks had an average return of 1.47% in the first quarter of eight of the past 10 years.
The 11 HD stocks that KCS recommends investors buy include both big-cap and middle-cap stocks. In addition to paying dividends of more than 2% in fiscal years 2023 and 2024, this group of fundamental stocks should have a growth trend, stable cash flow, or are in the main investment theme of KCS this year, such as those in an interest rate peak theme and stocks set to recover as the Thai economy expands by more than 3.0% this year.
Big-cap stocks include AP Thailand (AP) at a target price (TP) of 15.5 baht, with a dividend yield of 5.7% in the second half of this year; Land and Houses (LH), at a TP of 9.5 baht, for a yield of 4.9%; Srisawad Corporation (SAWAD) at a TP of 53 baht for a yield of 4.3%; Ngern Tid Lor (TIDLOR) at a TP of 30 baht for a yield of 2.8%; WHA Corporation (WHA) at a TP of 6.4 baht for a yield of 2.4%; Intouch Holdings (INTUCH) at a TP of 85 baht for a yield of 2.4%; and Advanced Info Service (ADVANC) at a TP of 264 baht for a yield of 2.0%.
The recommended mid-cap stocks are MC Group (MC) at a TP of 16 baht for a yield of 6.3%; North East Rubber (NER) at a TP of 6.1 baht for a yield of 4.5%; SC Asset Corporation (SC) at a TP of 4.5 baht for a yield of 4.34%; and Sansiri (SIRI) at a TP of 2.2 baht for a yield of 3.8%.
"Our research team has studied the dividend stock statistics of these 11 companies going back for eight years and found that if investors invested in these stocks two weeks prior to their XD [excluding dividend] date and sell them on the day that the SET posted such a sign, they get positive returns from the investment," KCS said in a research note.
Stocks that generated high returns for that period were TIDLOR (5.4%), ADVANC (3.7%), INTUCH (2.2%), and WHA, AP, SIRI, MC, NER, which had returns varying from 1.2-1.5%, KCS added.