The top five business groups in South Korea increased their total cash dividend by more than 4.7 trillion won last year by enhancing their shareholder return after stewardship code introduction by institutional investors such as the National Pension Service. An increase in dividend payouts is likely to continue for a while with activist funds raising their voices for return of excess capital.
The listed subsidiaries of the groups that have a December fiscal year end and made their dividend announcements until Feb. 19 paid a cash dividend of 18,265.2 billion won in 2018 whereas their total cash dividend had been 13,546.7 billion won in the preceding year.
Samsung Group’s dividend increased from 7,750.4 billion won to 11,685.8 billion won last year with Samsung Electronics increasing its dividend from 5,826.3 billion won to 9,619.2 billion won. Samsung Electronics’ dividend payout ratio rose from 14.09 percent to 21.92 percent. Likewise, Samsung Life Insurance and Samsung Fire & Marine Insurance raised theirs from 359.2 billion won to 475.9 billion won and from 425.1 billion won to 488.9 billion won, respectively.
LG Group’s cash dividend rose from 1,136.6 billion won to 1,314.8 billion won. LG Electronics’ dividend and dividend payout ratio went up from 72.9 billion won to 135.9 billion won and from 4.22 percent to 10.96 percent, respectively.
Lotte Group increased its cash dividend by 86.8 billion won to 656.9 billion won. Lotte Chemical maintained its dividend at 359.9 billion won in spite of a decline in net profit, raising its dividend payout ratio from 16.04 percent to 22.28 percent.
SK Group’s cash dividend rose 14 percent to 2,899.4 billion won. SK Telecom and SK Hynix increased theirs from 706.1 billion won to 717.4 billion won and from 706 billion won to 1,026 billion won, respectively. During the same period, Hyundai Motor Group’s dividend edged up 3 percent to 1,708.4 billion won.
At present, the dividend payout ratio of all listed South Korean companies is 20.3 percent. This is still much lower than the estimated dividend payout ratio of the global stock market, 47.1 percent.