As large businesses here turn toward shareholder-friendly management, listed firms’ cash dividends will likely hit a record high this year, the Dong-A Ilbo daily said quoting a local brokerage.
This year’s cash dividends by the 200 largest firms listed on the Korea Exchange are estimated to increase 15.6 percent from 2014 to 16.18 trillion won ($14.34 billion), Yuanta Securities said Tuesday.
Samsung Electronics will likely top the list of hefty dividend providers with 2.15 trillion won, followed by Hyundai Motor (539.7 billion won) and SK Telecom (508.7 billion won). This forces investors to pay attention to stock, as the estimated dividend yield ratio _ the percentage of dividend against market price _ of 1.52 percent approaches the average bank deposit rate of 1.55 percent.
The government’s policy to induce more corporate income to be circulated among investors and employees by lowering tax rates for high dividend-paying companies while raising them for firms with bigger cash reserves is bearing fruit, said an analyst at the brokerage.
Korean companies also seem to have begun to make the most of dividends to secure friendly shareholders. The domestic businesses’ overall dividend yield ratio stood at a mere 1.3 percent last year. Experts say if the companies manage to raise the ratio to the levels of China (1.8 percent) and Japan (1.6 percent), if not the U.S. companies’ 2.1 percent, it could ease investors’ complaints about stinginess.