According to the Federation of Korean Industries (FKI), the 235 listed subsidiaries of the South Korean conglomerates subject to cross-shareholding restrictions recorded an average dividend yield ratio of 1.12% this year, 0.12 percentage points higher than in the previous year.
The average dividend yield ratio of the 160 companies that paid dividends was 1.64%, 0.18 percentage points higher than a year earlier.
In the meantime, 64 of them posted a dividend yield ratio higher than the one-year treasury bond yield of 1.635% and their average was 2.81%. The 71 companies with a dividend yield ratio higher than the Bank of Korea’s benchmark interest rate of 1.5% posted an average of 2.69%. 35 of them paid dividends on preferred stocks and they showed an average dividend yield ratio of 2.18%.
When it comes to the average dividend yield ratio by industry, the financial and insurance sector was as high as 2.67%, followed by electrical, gas, steam and water supply business (2.56%), scientific and technological service business (1.72%) and manufacturing (1.67%).
Lee Cheol-haeng, head of the Corporate Policy Team of the FKI, explained that the South Korean conglomerates’ dividend yield ratio increased by approximately 12% from a year ago based on their efforts for shareholder value enhancement and the introduction of taxation on retained corporate earnings.