Long-term Investment Research on Companies with High Dividend Yields and Low P/E Ratios - Evidence from Taiwan Listed Companies

Abstract

Taiwan economic environment has been at low interest rates for a long term the situation had been no longer seen again that to make a basic living with deposit interest The general investor is seeking investment projects with higher returns Due to the asymmetric information the general investor hadn’t been survived in several financial crises In view of this this research focuses on companies listed on the Taiwan Stock Exchange This empirical research processes by using not only the buy-and-hold strategy for five consecutive years but also the stock selection criteria to F-Score as the first-tier screening criteria In this research: 1 the stock selection criteria to F-Score collocates with the high dividend yield gets the results that its portfolio return ratio is better than the investment return ratio of Taiwan weighted share price index in the same period 2 the stock selection criteria to F-Score collocates with low P/E ratio gets the results that its portfolio return ratio is better than the investment return ratio of Taiwan weighted share price index in the same period 3 the stock selection criteria to F-Score collocates with the method that extract the lower P/E ratio companies from the firms which meet the high dividend yield; the results show that its portfolio return ratio is not as well as the investment return ratio of Taiwan weighted share price index in the same period Based on the above investigation it is feasible to use the company's historical financial statements as a fundamental long-term investment stock selection strategy However investors should be prudent since investment usually accompanies risk

Date of Award	2020
Original language	English
Supervisor	Hsuan-Chu Lin (Supervisor)