Screening Chinese Stocks by RSI, Company Type, and Historical Dividend Payout
Summary
The proposed Chinese equity screen combines an RSI reading below 65 with a qualitative filter for favorable company type and a dividend payout ratio above 25% for 2019. The article describes the payout ratio as a measure of company returns and quality, then sketches how market and financial data could be combined to select stocks. It gives no backtest, selected-stock examples, or performance results, and the company-type condition is left for the user to define.
The main caveat is that RSI, company classification, and a past payout ratio offer a narrow view of an investment. Historical distributions may not reflect current fundamentals or future performance, and the accuracy or sustainability of financial data can affect the screen. The article suggests considering valuation measures, cash flows, dividend policy, operating history, and management. These additions are recommendations rather than tested parts of the stated rule, so the screen should be understood as an incomplete starting point.
Key ideas
- The screen requires RSI below 65 and a 2019 dividend payout ratio above 25%.
- It also includes a qualitative company-type filter that is not operationally defined.
- The document gives no backtest or performance evidence for the selection rule.
- Past payouts may not represent current financial conditions or future returns.
- Suggested checks include valuation, cash flow, dividend policy, operating history, and management.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.