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As of August 15, the number of listed companies that plan to pay interim dividends has reached 237, and this number will continue to grow. The number of companies paying interim dividends has exceeded last year's 194, setting a new high in recent years.

Interim dividends may be unfamiliar to A-share investors. In fact, from the analysis of interim dividend data of listed companies over the years, there are companies that implement interim dividends basically every year, but the situation this year is different. People are more concerned about whether listed companies implement interim dividends.

In the past, investors were used to cash dividends once a year, and listed companies were most enthusiastic about dividends in their annual reports. As for mid-term dividends, it depends on the sincerity of the listed company. Some listed companies are more generous and willing to take measures to distribute mid-term dividends to improve shareholders' return expectations. However, for most listed companies, the willingness to distribute mid-term dividends is not high, and the awareness of shareholder returns is not strong.

This year, the number of interim dividends paid by A-share listed companies has hit a new high in recent years. As of August 15, the number of listed companies that have implemented interim dividends has reached 237. Even though the number of companies implementing interim dividends has hit a new high, compared with the total number of listed companies in the A-share market, the proportion of interim dividends is less than 5%, which still has a lot of room for improvement.

Looking at the Hong Kong and US stock markets, it is a normal phenomenon for listed companies to implement mid-term dividends. Some outstanding listed companies have also implemented quarterly dividends, that is, four times a year. The most representative listed companies include HSBC Holdings, Apple, Microsoft, etc.

Why should we pay attention to the cash dividend ability of listed companies?

There are three benefits for investors when listed companies implement cash dividends in the long term.

The first benefit is that listed companies use real money to pay dividends, which allows investors to see real cash. Companies that insist on paying cash dividends for a long time are very unlikely to commit financial fraud. Therefore, the long-term implementation of cash dividends by listed companies can play a role in financial minefield clearance.

The second benefit is that investors receive stable cash dividends, which can improve the utilization rate of funds and greatly reduce the pressure of reducing stock holdings in the secondary market. For some listed companies with large number of major shareholders, if the listed companies adopt stable cash dividends, the risk of major shareholders selling stocks in the secondary market will be greatly reduced. The cash dividends adopted by listed companies can also better lock in major shareholders and strategic investors, prompting them to maintain long-term holdings and not sell.

The third benefit is that listed companies adopt the long-term cash dividend action. After receiving the dividend funds, the major shareholders and actual controllers can use them for re-production and re-investment. Through the long-term dividend reinvestment action, the major shareholders' equity position can be further consolidated, which has a positive impact on the stable operation of listed companies.

Cash dividends or stock buybacks, which one is more beneficial to investors?

Cash dividends and stock repurchases each have their own advantages, and the best way is to combine cash dividends with stock repurchases. However, in actual circumstances, which one is more beneficial to investors depends on their actual needs.

For example, if an investor prefers short-term transactions and holds stocks for no more than one month, he or she does not like cash dividends because cash dividends need to consider the cost of dividend tax. The dividend tax for holding stocks for less than one month is as high as 20%, which will incur high transaction costs for investors who frequently buy and sell stocks.

If an investor likes long-term investment and holds stocks for more than one year, he/she will prefer high-dividend stocks, because he/she holds stocks for more than one year and therefore does not have to pay dividend tax. The more frequent cash dividends paid by listed companies and the higher the dividend rate, the more beneficial it is to investors.

Regarding stock repurchases, it is necessary to observe the methods used by listed companies to repurchase stocks and the specific uses after the repurchase. For example, if a listed company uses its own funds to repurchase stocks and uses them for cancellation after the repurchase, then this move is more beneficial to investors. The U.S. stock market has been in a bull market for more than ten years, which is also due to the long-term stock repurchase and cancellation measures taken by listed companies.

If listed companies implement a distribution method that combines cash dividends with repurchases and cancellations over the long term, it will be friendlier to investors and more likely to boost investors' confidence in long-term holdings.