Let's Secure Summer Vacation Bonuses... Samsung Electronics, Hyundai Motor, LG Uplus Expected "Hold Until the 28th"

[Asia Economy Reporter Lee Seon-ae] Ahead of the interim dividends of listed companies at the end of June, investors' movements to find 'dividend stocks' to secure a 'summer vacation bonus' are gaining momentum. This year, the number of companies implementing 'quarterly dividends' in the first quarter reached 10 (based on KOSPI 200), indicating that the scale of 'interim dividends' is expected to increase due to the spread of quarterly dividends. Safe dividend stocks that can respond to downside risks amid the global stock market downturn are expected to emerge as popular investment alternatives.

According to the financial investment industry on the 7th, the number of companies among KOSPI 200 constituents that paid dividends in the second quarter was 17 last year, but is expected to increase to 21-23 this year.

Since 2017, seven KOSPI 200 companies have paid interim dividends for five consecutive years: Samsung Electronics, POSCO Holdings, Hana Financial Group, SK Telecom, Hanon Systems, Ssangyong C&E, and KCC. Among these, six companies except POSCO Holdings are expected to see an increase in operating profit this year compared to the previous year. During the same period, three KOSPI 200 companies?Hyundai Motor, SK, and S-Oil?have paid interim dividends four times. Since Hyundai Motor, SK, and S-Oil are expected to see a sharp increase in operating profit this year compared to the previous year, the possibility of interim dividends is high. In particular, the scale of interim dividends for major companies such as SK Telecom and S-Oil is expected to increase. Some companies have already announced an expansion of interim dividends. LG Uplus recently announced that it would raise its interim dividend. SK Hynix, KB Financial Group, Hanssem, and CJ CheilJedang have expanded the number of dividend payments from annual dividends to quarterly dividends starting this year.

Lotte Chemical, SK Chemicals, and Cosmax have also drawn attention by signaling the possibility of paying semi-annual dividends starting this year through amendments to their articles of incorporation or shareholder return policy announcements. SNT Motiv, which paid interim dividends last year, will be excluded from the KOSPI 200 due to a regular change in June this year, while K Car, which paid quarterly dividends in the first quarter this year, is expected to be newly included.

Interim dividends refer to profits distributed in the middle of the fiscal year. For companies with a December fiscal year-end, June 30 is set as the interim dividend record date. Since dividends are usually paid around July to August, investors perceive them as a 'summer bonus.' To receive interim dividends, investors must purchase the relevant stock by the 28th, two days before the record date.

The scale of interim dividends is expected to increase this year. Jeon Gyun, a researcher at Samsung Securities, said, "As quarterly dividends increase among major stocks, the scale of interim dividends in June for these companies may differ from before," adding, "Among companies newly introducing quarterly dividends, some (SK Hynix, CJ CheilJedang, Hanssem, K Car) previously focused only on year-end dividends, while others (KB Financial, Shinhan Financial, SK Telecom) that previously focused only on interim and year-end dividends have expanded to quarterly dividends, so the dividends paid in June this year are likely to increase compared to before."

NH Investment & Securities expects the total cash dividends for the second quarter of KOSPI 200 constituents to reach 3.42 trillion KRW based on floating shares. Based on a floating market capitalization of 1,101 trillion KRW, the dividend yield is projected at 0.31% (reflecting the June regular changes and floating ratio adjustments). Last year, the total cash dividends for KOSPI 200 constituents in the second quarter amounted to about 2.64 trillion KRW (dividend yield about 0.24%).

Except for 2020, when dividends shrank due to the impact of COVID-19, the scale of interim dividends has been increasing every year. According to financial information provider FnGuide, the scale of interim dividends (based on common shares) for KOSPI 200 listed companies increased as follows: ▲2017: 1.9403 trillion KRW ▲2018: 3.4806 trillion KRW ▲2019: 3.6297 trillion KRW ▲2020: 2.8234 trillion KRW ▲2021: 4.5824 trillion KRW.