Retirement Dividend Stocks: China Mobile (CHL)
- Market cap: $194 billion
- Current dividend yield: 4.2% (based on its total 2013 payouts of roughly $2.01)
- Payout ratio: 41% of projected 2014 earnings
- Dividend growth: 550% in 10 years, from 30.8 cents per share in 2003 to $2.01 last year
China Mobile (CHL) frequently takes a back seat to domestic telecom stocks like AT&T (T) and Verizon (VZ). But there’s little growth for U.S. telecoms — and more importantly, a miserly history of dividend increases.
While China Mobile has been increasing its payouts steadily over the last 10 years, with a 550% increase in dividends since. AT&T has seen a dividend increase of just 47% in the same period and Verizon just 38%.
The CHL dividend payout ratio is less than half of projected profits, and more importantly, China Mobile has significant growth prospects as China gets increasingly wired. The Asian telecom should report roughly double-digit revenue growth in 2013, after about 9% revenue growth in 2012.
Sure, CHL is in a battered emerging market and there are serious concerns about China’s economy broadly. But the biggest concern is how China will transition from an old manufacturing-based economy into a consumer and technology-driven one — and that means China Mobile is the way of the future.
Besides, it has more than 750 million wireless subscribers — more double the population of the U.S. — and more than 60% share of China’s mobile market. So there clearly is some stability here given its massive scale.