Considering investing in CHN as a dividend stock

Question

I've been looking at investing in another dividend stock, and I have been using dividata.com to do some research.

I have found several stocks that I am interested in that have a roughly 9% or 10% dividend yield. I also found The China Fund (NYSE: CHN) that has a 20% dividend. A 20% dividend is attractive, of course, but I'd rather not make a poor investment if that stock is not reliable.

I am confused about the information I am receiving about this specific stock. When looking at the data on dividata.com, it looks good in many respects:

https://dividata.com/stock/CHN

The stock price has grown from ~$5 to ~$17 per share in that time period, and quite steadily. dividata.com also says that they have a 22-year history of paying out dividends. The payout for the past 5 years has been fairly steady, although there have been some incontinuities in the recent past:

https://dividata.com/stock/CHN/dividend

This data does not match what I see on Google Finance, however:

https://www.google.com/finance?q=NYSE%3ACHN&ei=em22VaHXF6mWigK_6KOIBA

The stock price data on Google Finance is completely different that what I see on dividata.com. Also, Google Finance says that the dividend yield is 1.68% with a 0.30/share payout.

Can anyone tell me why there is inconsistencies in the data between the two sites? Why doesn't it match up?

Answer 1

CHN is a Closed-End Fund.

CHN actually pays out three types of distributions:

1. Standard cash dividends (these are cash dividends paid out by the constituent stocks held by the Closed-End Fund)
2. Short-term capital gains
3. Long-term capital gains

In the case of CHN, they appear to be paying yearly. The most recent dividend, with exdate of 18 Dec 2014, consisted of $3.4669 of Long-term capital gains and $0.2982 cash dividend.

Prior to that, the dividend with exdate of 19 Dec 2013 consisted of $2.8753 long-term capital gains and $0.4387 cash dividend.

For a standard dividend yield you typically would not expect short-term and long-term capital events to be included in a yield calculation, as these events really only occur in relation to a fund rebalancing (changing its investments) and are not really due to the actual performance of the fund in any way. Most free sites that provide dividend information do not make a distinction on the dividend type.

Data source: Premium Data

Full Disclosure: I am a co-owner of Premium Data/Norgate.

Answer 2

The yield on Div Data is showing 20% ((3.77/Current Price)*100)) because that only accounts for last years dividend. If you look at the left column, the 52 week dividend yield is the same as google(1.6%). This is calculated taking an average of n number of years. The data is slightly off as one of those sites would have used an extra year.