Hello everyone. I’m @olivertomolife and I love investing and shareholder special offers!
When you start investing, companies with high dividends are attractive, right?
However, making decisions based on dividends alone can lead to unexpected mistakes.
That’s why I’d like to recommend investing in trading company stocks!
Trading companies are easily influenced by the economy, but they are also characterized by undervalued average indices.
I’d like to introduce three companies that I recommend.
- Want to start investing, but are not sure which stocks to buy.
- Are looking for high dividend stocks.
- Are looking for stocks with a sense of stability.
- Should I buy trading company stocks for dividends?
- Advantages and disadvantages of trading company stocks
- Top 3 recommended trading companies
The author has been investing for three years and has experience in the securities industry.
By reading this article, you’ll learn all you need to know about these high-dividend trading companies!
Should you buy a trading company for its dividends?
Shosha are popular because of their high dividends, but I believe that you should buy them for their dividends.
This is because trading companies, which operate a variety of businesses both domestically and internationally, have a good balance of businesses.
A company specializing in travel, for example, would lose a significant amount of money if it were unable to travel outside.
This is because the company is 100% dedicated to a single business.
Trading companies, on the other hand, are diversified businesses, so even if one part of their business is affected, they can make up for it in other areas.
For this reason, trading company stocks are stable and easy to invest in.
I believe that trading companies and mutual funds are similar in some ways.
Shosha do a lot of business, and they also have investments.
Mutual funds also manage the stocks of many companies, so we can say that they have something in common.
If you like mutual funds and want to receive a lot of dividends, this is the best investment for you.
Advantages and disadvantages of trading company stocks
Of course, there are advantages and disadvantages to trading company stocks.
Let’s talk about them.
Advantages
1 Good dividends
The following table shows the dividend yields of the five major trading companies.
| Itochu | 2.71 |
| Mitsubishi Corporation | 4.35 |
| Mitsui & Co. | 3.35 |
| Sumitomo Corporation | 4.73 |
| Marubeni | 3.45 |
On average, a dividend yield of 3% is considered good, so you can see that trading companies pay very high dividends.
In particular, Mitsubishi Corporation and Sumitomo Corporation offer a yield of 4%.
2 Large companies with a sense of stability
Listed companies range in size from small to large.
Since trading companies are large and have many affiliates, they are relatively stable.
Since they have a large market capitalization, they have a strong presence in the market and price movements.
Holding stocks with small price movements for a long time is a good approach, but trading companies are also suitable for long-term holding.
3 Undervalued
Shosha are said to be undervalued stocks for many years.
The PER and PBR of the five major trading companies are shown below.
| PER | PBR | |
| Itochu | 8.8 | 1.46 |
| Mitsubishi Corporation | 12x | 0.81 |
| Mitsui & Co. | 9x | 0.91x |
| Sumitomo Corporation | 8x | 0.73x |
| Marubeni | 7.2 | 0.91 |
On average, a PER of 15 times is considered good, but trading companies are cheaper than that.
P/B ratio is also considered to be good at 1x on average, so many companies are cheaper than that.
Possible reasons for this undervaluation are that they are difficult to predict due to their diversified businesses, and that they are easily influenced by commodities such as energy.
Disadvantages
1 Easily influenced by the economy
Trading companies are said to be susceptible to the effects of the economy due to the large percentage of their business in resources.
In addition, they are also susceptible to currency fluctuations.
However, due to the risks involved in business, there is no need to worry about such serious effects.
2 Capital adequacy ratio
The capital adequacy ratios of the five major trading companies are shown below.
| Capital adequacy ratio | |
| Itochu | 29.67 |
| Mitsubishi Corporation | 30.12 |
| Mitsui & Co. | 36.52 |
| Sumitomo Corporation | 31.29 |
| Marubeni | 26.22 |
One of the characteristics of trading companies is that their equity ratio is low.
The reasons for this are that they have fewer fixed assets than other industries and more liquid assets.
Therefore, a low equity ratio is not a problem for a trading company.
Recommended Top 3 Trading Companies
3 Mitsui & Co.
This company is strong in steel and natural resources, and its business model is easily affected by the economy.
However, it has the top performance and track record of a general trading company.
2 Mitsubishi Corporation
Mitsubishi Corporation is the largest trading company in Japan and has the highest market capitalization in the industry.
It is also strongly influenced by the Mitsubishi zaibatsu, and its performance has been strong.
1 ITOCHU Corporation
It is the best performing trading company in terms of shareholder returns and charts.
It is non-conglomerate and strong in non-resources, making it less susceptible to the effects of the economy.
Conclusion
- Shosha are stocks to buy for dividends.
- Itochu is the most recommended trading company
- Each has a high dividend yield.
This article introduced trading companies as high-dividend stocks.
I will continue to provide useful information for beginners, so please stay tuned.
Thank you for reading to the end!
コメント