Sustainable dividend distribution is the social responsibility of listed companies.

Achieving sustainable dividend payouts and increasing dividend efforts are the unshirkable social responsibilities of listed companies, especially blue-chip stocks and "cash cows," as public companies. Those with the conditions to pay dividends and the ability to increase payouts should generously reward investors.

Let’s start with a story.

On April 1, 2020, HSBC Holdings announced it would suspend dividends, and Standard Chartered Group also released news of halting payouts. That day, HSBC Holdings and Standard Chartered Group in the Hong Kong market fell by over 10% and 8%, respectively. Some Hong Kong citizens formed the HSBC Small Shareholders Rights Alliance to demand the resumption of dividends and compensation for losses. It’s worth noting that HSBC’s dividends are crucial for many Hong Kong residents—some even have an emotional attachment to the bank. Many people buy HSBC Holdings shares with their annual bonuses, waiting for dividends, and for some, a significant portion of their pension comes from listed companies’ payouts. Proverbs like "Buy HSBC at Christmas" are widely known. Thus, HSBC’s dividend suspension was a bolt from the blue for small retail investors who relied on these payouts to boost consumption or supplement household income. This shows that HSBC’s dividend halt not only dragged down its stock price but also had severe negative social repercussions. This is just one example illustrating the importance of dividends.

I believe that listed companies’ dividend payouts benefit not only the companies themselves but also society at large.

The positive impact of increasing dividends on companies is obvious: stock price appreciation, higher valuations, and additional income for shareholders and employees.

Beyond benefits for companies and major shareholders, I consider sustainable dividend payouts a critical part of corporate social responsibility (CSR), with significant societal value.

Anyone who’s taken high school political courses knows that companies generate profits by extracting surplus value from employees—meaning labor includes necessary labor and surplus labor, with the latter creating surplus value.

Wealth distribution in society occurs in three forms: primary distribution, secondary distribution, and tertiary distribution. For ordinary people, primary distribution means salaries and year-end bonuses—easy to understand. Secondary distribution, led by governments, emphasizes fairness and inclusivity. Tertiary distribution can be seen as philanthropy.

Now, I’d like to propose calling listed companies’ dividend payouts the fourth distribution.

In a sense, listed companies are among the nation’s best, capturing vast surplus value and generating substantial profits. Dividends represent a form of profit distribution, delivering cash to shareholders—including countless retail investors. The A-share market has a massive base of individual investors and fund holders, though exact numbers vary. Regardless, the sheer volume of retail investors is a defining feature of A-shares. Dig deeper, and behind these millions of investors are countless families or individual consumers.

Next, let’s discuss dividends’ role in personal retirement planning. I’ve seen posts on Snowball about "accumulating stocks for retirement," and I agree—dividends can indeed enhance retirement security for individuals and families. Currently, retirement relies on three pillars: basic pension insurance, enterprise annuities, and personal pensions. Basic pension insurance is what people call social security. Personal pensions, promoted by banks and financial institutions in recent years, are still in the pilot phase. Some banks even offer incentives to open personal pension accounts. However, personal pensions aren’t yet widespread, so their impact remains limited.

Earlier, I likened dividends to the fourth distribution; similarly, I believe they could become the fourth pillar of retirement. The Hong Kongers in the HSBC story treated dividends as a retirement pillar—though some may have over-relied on them without diversifying investments.

Moreover, increased dividends can attract more long-term capital to the market, enhancing A-shares’ investment appeal. Historically, no powerful modern nation has thrived without a robust capital market. Strengthening shareholder returns is one way to elevate A-shares’ global standing.

Of course, we must guard against unsustainable practices like draining company reserves or borrowing to pay dividends—as seen with some defaulted property firms. Tech startups or loss-making enterprises can’t pay dividends. But blue-chips and "cash cows," such as monopolistic state-owned enterprises, have a duty to increase payouts.

In summary, listed companies boosting sustainable dividends not only enhance investment value but also fulfill their CSR as public entities. Those capable should generously reward investors.

Sustainable dividends deliver real cash to retail investors, boosting public satisfaction, consumption willingness, and economic recovery. At this critical juncture of economic headwinds, dividends can bolster confidence—serving both as a tool for corporate value management and an unshirkable social responsibility.