PetroChina Leads China Commodity Stocks With Dividend Yield of 5.16%

Geopolitical tensions are escalating between Russia and Ukraine, pushing up commodity prices and shipping costs. The conflict is centered around grain trade, with both countries accounting for approximately 30% of global wheat exports.

This makes it a timely moment to examine commodities, but few investors are familiar with them. A more approachable way in is through commodity stocks, which benefit when commodity prices rise.

PetroChina stands out as the largest Chinese oil and gas player, boasting a dividend yield of 5.16%. This surpasses Western peers such as Exxon (2.5%) and Shell (3.4%).

The higher yield can be attributed to two factors: lower valuation multiples for Chinese equities due to governance and geopolitical concerns, and Beijing's policy to push state-owned enterprises to pay out more dividends.