A Trend Toward Expanding Dividend Payouts
The total amount of cash dividends paid out by South Korean companies listed on the country’s main Kospi bourse is expected to surpass 30 trillion won (US$26.62 billion) in 2018 for the first time.
Market researcher FnGuide said on Feb. 13 that 412 companies listed on the main Kospi and secondary Kosdaq markets have disclosed their final cash dividend payout schemes for 2018 as of Feb. 12. Their dividends per share (DPS), including interim and final dividends, increased by 10.32 percent on average from a year earlier. The figure excludes the 50 companies which did not pay out any cash dividends in 2017 but decided to pay them last year. The total amount of cash dividends paid out by these companies came to 141.2 billion won (US$125.29 million) last year.
The total amount of cash dividends paid out by 412 listed companies grew by 25.4 percent from 18.52 trillion won (US$16.43 billion) in 2017 to 23.22 trillion won (US$20.61 billion) last year.
Since the earnings season is not over yet, listed companies will continuously announce their results and disclose cash dividend payout schemes in a regulatory filing in the future. The visible trend is towards expansion of dividend payouts. The total amount of full-year dividends of Kospi-listed companies rose from 13.2 trillion won (US$11.72 billion) in 2013 to 20 trillion won (US$17.76 billion) in 2015 and 26.4 trillion won (US$23.45 billion) in 2017. The figure is expected to exceed 30 trillion won (US$26.62 billion) in 2018 for the first time.
The National Pension Service (NPS) played a part in increasing dividend payouts. The DPS of Hyundai Green Food Co., which was included in the NPS’ blacklist for paying low dividends to shareholders, surged as much as 162.5 percent from 80 won (US$0.07) in 2017 to 210 won (US$0.19) in 2018.
Companies which have announced an active shareholder return policy show a rapid rise in stock prices. Although Hyosung Corp. has not disclosed its dividend plan yet, the price of its shares increased by more than 36 percent this year as it is forecast to pay out over 4,000 won (US$3.55) per share in final dividends for 2018, a dividend rate of 8 percent.
However, some point out that the trend of dividend expansion is only limited to large companies. The DPS growth rate of the top 10 Kospi companies in terms of market capitalization, excluding those that have not disclosed their results or paid out any cash dividends, stood at 16 percent last year, much higher than that of 412 companies.
Meanwhile, a considerable number of companies have reduced their dividends due to poor performance. In particular, the DPS of LG Hausys Ltd. plunged by a whopping 86.1 percent from 1,800 won (US$1.60) in 2017 to 250 won (US$0.22) last year.