Friday, February 28, 2020
Dividend Payout Ratio of KOSPI-listed Companies Estimated at 27%
Firms Likely to Face Pressure to Raise Dividends
Dividend Payout Ratio of KOSPI-listed Companies Estimated at 27%
  • By Yoon Young-sil
  • January 29, 2020, 10:03
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Institutional investors are predicted to put more and more pressure on listed companies for dividend payment.

Market research firm FnGuide said on Jan. 28 that 197 KOSPI-listed companies and 100 KOSDAQ-listed companies are expected to provide cash dividends equivalent to 26.65 percent and 22.46 percent of their net profits per share, respectively. In July last year, the National Assembly Budget Office announced that listed South Korean companies ranging 0 percent to 100 percent in dividend payout ratio posted an average dividend payout ratio of 29.43 percent in 2018.

Naver and Kakao, which are expected to have grown a lot last year, stand at 7.1 percent and 10.3 percent in dividend payout ratio, respectively. Also, 51 listed companies are likely to pay no dividends this year.


Under the circumstances, institutional investors such as the National Pension Service are predicted to put more and more pressure for dividend payment in upcoming shareholder meetings. Listed South Korean companies’ average dividend payout ratio is much lower than the 2008 to 2018 average of those in G7 countries, 41.58 percent, and that of those in emerging countries, 36.8 percent.
 

However, it is also pointed out that the dividend payout ratio should not be the sole yardstick for evaluating listed companies’ shareholder return efforts. “The dividend payout ratio based on cash dividends is not sufficient for evaluating the other shareholder return policies such as stock buyback, which is becoming more and more frequent these days,” said an industry expert.