Riyadh-Mubasher: Saudi Fransi Capital (SFC) has selected 12 stocks as its top dividend picks for 2016 amid a backdrop of weaker oil price, lower government spending and higher energy costs.
Instead of including names with the highest dividend yields, SFC considered some factors in determining the candidates, including track record of dividend history with a set payout policy, sustainability of dividends in a shifting operating environment, balance sheet strength, leverage levels and capital commitments
In an environment of normalised equity return expectations (sub-10%), the dividend supplement (6.9%) reduces valuation expansion hurdle to achieve target return, the research firm said.
The expected dividend yield for the list exceeds TASI by 230 bps and 12M SAIBOR by 500 bps.
