57% of Top 100 Market Cap Companies Guarantee Dividends Higher than Benchmark Interests

64 percent of the top 100 companies in market capitalization increased dividends this year.

A total of 44 (63.8 percent) of 69 companies that announced their dividend plans have decided to pay more dividends than the previous year, according to CEO Score, a website which assesses companies’ performances on February 25.

20 companies (29.0 percent) announced plans to pay dividends at the same level as last year. Only five of them (7.2 percent) lowered dividends from the previous year.

However, the dividend payout ratio (dividends/stock prices) of these companies was 1.83 percent, down 0.08 percentage points from the previous year. This is because share prices rose thanks to a boom in the stock market last year and the rise eclipsed the spike in dividends.

According to the results of analyzing dividend payout ratios by companies, 39 companies which were more than half of all surveyed companies recorded dividend payout ratios higher than the current benchmark interest rate (1.5 percent) of the Bank of Korea (BOK).  In particular, S-Oil (4.74 percent) and ING Life (4.44 percent) recorded dividend payout ratios higher than 4 percent.

Companies with dividend payout ratios of more than three percent were SK Innovation (3.92 percent), Samsung Fire and Marine Insurance (3.70 percent), SK Telecom (3.65 percent), Hyosung and Samsung Card (3.60 percent, each), KT&G (3.32 percent), Coway (3.24 percent) and KB Financial Group and Hyundai Fire and Marine Insurance (3.1 percent, each).

Companies with dividend payout ratios lower than the benchmark interest rate totaled 30 which includeKakao (0.10 percent), Netmarble Games, Naver, Hanmi Pharmaceutical and LG Innotek (0.20 percent, each) and CJ E&M, Hanmi Science and Mando (0.30 percent, each).

In terms of absolute amounts of a dividend per share, Samsung Electronics with the highest amount of market capitalization chalked up the highest dividend of 42,500 won (US$38.2), followed by Lotte Chemical (10,500 won or US$9.4) and Samsung Fire & Marine and SK Telecom (10,000 won or US$9.0, each).

"Dividends increased sharply as large corporations recorded better business scorecards and adopted shareholder-friendly policies last year," a CEO Score representative said. "In particular, Companies whose largest shareholders are foreigners or private equity funds such as S-Oil, ING Life and Coway wrote down high dividend payout ratios."