The combined annual cash dividends paid out by South Korean companies listed on the country’s main Kospi bourse has continuously increased over the past five years to 22 trillion won (US$20.52 billion). The figure has nearly doubled in five years. However the dividend payout ratio has slightly dropped as the increase of cash dividends fell short of the rise of net profit. Firms listed on the secondary Kosdaq market also saw their combined cash dividends grow about 11 percent compared to the previous year.
According to Korean securities exchange operator Korea Exchange (KRX) on April 12, 537 companies, or 72 percent, of total 745 companies listed on the main Kospi market disclosed cash dividend payments in a regulatory filing in 2017 and their total dividend payout amounted to 21.8 trillion won (US$20.34 billion), hitting a five-year high.
The combined annual cash dividends of the Kospi-listed firms has almost doubled in five years from 11.8 trillion won (US$11.01 billion) in 2013. The ratio of companies that paid out their dividend also surged 10 percent over the same period from 63.4 percent in 2013.
Last year’s average dividend yield stood at 1.86 percent, showing a rising trend for four years in a row. The dividend rate surpassed the yield of a 1-year treasury bond at 1.543 percent as of last year for the third consecutive year. By industry, telecommunications with 2.77 percent, electricity and gas with 2.73 percent and banking with 2.39 percent ranked among the top in the last five years.
However, the dividend payout ratio slightly decreased to 33.81 percent this year from 34.46 percent a year earlier. The dividend payout ratio provides an indication of how much money a company is returning to shareholders from profits. The dividend payout ratio has lowered despite the growth of dividends. Through listed companies’ net profits surged as much as 49.2 percent last year, the amount of dividends has not increased proportionately, according to the KRX.
The rise of stock prices of listed firms that paid out cash dividends last year came to 7.99 percent, falling short of 21.76 percent of the growth of the Kospi.
Meanwhile, 544 companies listed on the Kosdaq paid out a total of 1.41 trillion won (US$1.31 billion) of cash dividend last year. The companies and dividends increased 8.3 percent and 11.6 percent, respectively, from a year ago. The dividend payout ratio recorded at 31.1 percent, surpassing the 30 percent mark for the first time in five years.