Soufun Looks For More Support With New Dividend 搜房网借新派息计划寻求支撑股价
When does a 31 percent dip in your share price look good? When your rivals’ share prices have fallen by even more, or at least that seems to be the thinking at real estate services firm Soufun (NYSE: SFUN), which has just announced its second dividend in the last 4 months amid a broader sell-off that has seen many US-listed China stocks tumble by even more in the last few months. Soufun’s latest plan looks even more attractive now than the first plan announced in August (previous post), as the payout amount will remain at $1 per American Depositary Share, translating to a return of about 7.5 percent based on the company’s latest share price. (company announcement) That’s up from a payout ratio of about 5 percent for the August dividend, when the company’s shares were quite a bit higher. A growing number of US-listed companies have tried the dividend approach, including chipmaker Spreadtrum (Nasdaq: SPRD) and online game specialists Giant Interactive (NYSE: GA) and most recentlly Shanda Games (Nasdaq: GAME), betting that cash payouts will appeal more to investors than traditional share buybacks. So how effective is the dividend strategy? A quick comparison shows that while Soufun’s shares are down 31 percent since it announced its first dividend, its closest rival, E-House (NYSE: EJ) is down by an even bigger 42 percent over the same period, showing the strategy may have some effect. Of course, Soufun’s recent posting of solid third-quarter results, even in the face of China’s rapid real estate slowdown, may also be helping its stock. (previous post) For all of those reasons, Soufun may indeed look like a nice play going forward. Dividends may be good for short-term investors, helping to support stock prices and provide some definite returns in uncertain markets. But for longer term investors, there’s still no replacement for solid company fundamentals and growth prospects, meaning it still pays to check a company’s bottom line no matter how nice the dividend.
Bottom line: The dividend approach being tried by many US-listed China firms is providing some short-term support for share prices and quick returns for investors.
Related postings 相关文章:
◙ Shanda Plays Games With Big Dividend 盛大游戏寄望高额分红计划提振股价
◙ Investors Pocket Spreadtrum, Giant Dividends and Run
◙ Sofun’s New Strategy: Dividend Wave Ahead? 搜房网新策略：中国概念股派息潮即将来临？
