5 Popular Stocks in Japan that Offer Yutai Gifts (June 2020 Update)

A year ago I posted Top 5 Popular Stocks in Japan that Offer Yutai Gifts where I shared a popular list of yutai stocks. Given the interest received for that post, I created an updated list for 2020 that I would like to share with you. Some of my picks remain unchanged and it wouldn’t be interesting simply just re-introducing the same stocks so I will be doing something slightly different. Rather than ranking the “Top” stocks, I will introduce to you 5 stocks that pay out interesting yutai gifts.

There is a lot of material in Japanese, very often promoted by online brokers or other blogs and newsletters, but I couldn’t find a lot of content in English which is what led me to start this series of of posts.

Before I start introducing the stocks, as a disclaimer I must say that I don’t encourage simply investing in a stock because of the yutai. Personally I think that you should treat these as just additional perks and base your investment decisions on the stock’s core business and how it fits into your portfolio. Having said that, yutai investing remains very popular in Japan with the appeal of the yutai yield(優待利回り) which can range from 3-8%.

From what I have seen in the past years about yutai yields, they can signify two things, either that the company has been successful in competitively providing high yielding perks that people find valuable (I think Skylark is a good example) or that due to recent bad news the stock price has taken a huge hit causing the share price to trade at a massive discount relative to the perk. Please be wary of the latter case, as almost definitely the company will discontinue the yutai as it attempts to ration resources to support its core business.

I have listed below my picks for this month. Investment Amounts are calculated based on closing prices of 5th June 2020.

(1) Orix Group (8591)

Company Website
What do they do? Founded in 1964, the company started by offering lease services and has expanded its business segment by adding maintenance lease, real estate, retail, business investments.

Yutai
– catalog gift which features products offered by Orix’s business partners. From the 2019 choices we can see craft beer, salmon cavier (ikura) as examples.
– the second gift which arguably a lot of people might find most appealing if they use Orix’s services is the shareholder card, this link (in Japanese) provides a comprehensive list of discounts on their hotels, car rental, clinics, aquariums, Orix Baseball Club and more. The company operates in a wide range of business segments so if you happen to be a regular client it might be worthwhile looking into the cost savings from this investment.
– shareholders holding the stock for 3 or more consecutive years will receive a gift catalogue with a greater variety of choices.

Ex-Rights Months: March/September
Yutai Yield: 5.20-5.50%
Minimum Shares Required: 100
Investment Amount: 1,491 JPY * 100 = 149,100 JPY

(2) H.I.S. Co. Ltd. (9603)

Company Website
What do they do? HIS is a very famous travel agency in Japan. In addition to its numerous travel businesses, the company operates hotels, theme parks, energy and insurance businesses and a wide range of local business in Japan.

Yutai
For 100 shares, the company will give out coupons with a face value of 2,000 JPY every 6 months. These coupons can be used at HIS’s group companies (mostly travel services). The company’s IR page provides more details on this benefit.

Ex-Rights Months: April, October
Yutai Yield: 2.80-3.20%
Minimum Shares Required: 100 for 4,000 JPY / 500 for 5,000 JPY / 1,000 for 12,000 per year.
Investment Amount: 2,042 JPY * 100 = 204,200 JPY

(3) Yoshinoya Holdings Co. Ltd. (9861)

Company Website
What do they do? Yoshinoya is a food chain famous for its gyudon (beef bowl). The company also runs other restaurant franchises such as Hanamaru (udon restaurant chain) and Kyotarou (sushi chain).

Yutai: every 6 months they will send you a booklet of coupons with the value of 3,000 JPY (10 coupons each worth 300 JPY) which can be spent at their restaurants.

Ex-Rights Months
: February, August
Yutai Yield: 2.30-2.60%
Minimum Shares Required: 100 for 6,000 JPY / 1,000 for 12,000 / 2,000 for 24,000
Investment Amount: 2,493 JPY * 100 = 249,300 JPY

(4) Nissin Foods Group (2897)

Company Website
What do they do? Nissin is famous for its brand of instant noodles which accounts for the company’s core revenue stream, but also operates other segments such as chilled and frozen foods, confectionary, beverage and other food services. The brand is very well represented in Japanese supermarkets.

Yutai: a selection of company products worth 3,000 JPY twice a year. This can also be exchanged for a charitable donation to the WFP (World Food Programme).

Ex-Rights Months
: March, September
Yutai Yield: 0.30-0.40%
Minimum Shares Required: 100
Investment Amount: 8,700 JPY * 100 = 870,000 JPY

(5) Yamada-Denki Co., Ltd. (9831)

Company Website
What do they do? Yamada-Denki is one of the largest consumer electronics retail chains in Japan. The company sells home appliances, audio & visual systems, telecommunication equipment, etc.

Yutai: you will receive coupons which can be used at their stores. Please note that to be able to use one coupon you need to spend at least 1,000 JPY at their store.

Ex-Rights Months
: March, September
Yutai Yield: 5.50 – 6.0%
Minimum Shares Required:

March
100 Shares = 1,000 JPY
500 Shares = 2,000 JPY
1,000 Shares = 5,000 JPY
10,000 Shares = 25,000 JPY

(if at least 100 shares a held for over a year an extra 1,500 JPY will be added, if shares are held for over 2 years, instead an extra 2,000 JPY will be added)

September
100 Shares = 2,000 JPY
500 Shares = 3,000 JPY
1,000 Shares = 5,000 JPY
10,000 Shares = 25,000 JPY

(if at least 100 shares are held for over a year an extra 500 JPY will be added)

Investment Amount: 553 JPY * 100 = 55,300 JPY

These were my picks for the month, hope you found them interesting. If you have any interesting yutai stocks worth sharing, please let me know. Thanks for reading.

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