Banks with High Dividend Appeal... Should You Receive Dividends or Avoid Ex-Dividend Date?

The KOSPI opened at 2,471.50, down 8.34 points (0.34%) from the previous trading day. The photo shows the dealing room of Hana Bank in Jung-gu, Seoul, on the 2nd. On the same day, the won-dollar exchange rate started at 1,303.5 won, up 3.8 won from the previous trading day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Lee Myunghwan] As the year-end dividend season approaches, securities firms have advised paying attention to bank stocks, which are representative high-dividend stocks. However, they also cautioned that it may take some time for stock prices to recover after the ex-dividend date.

On the 4th, IBK Investment & Securities analyzed, "Although the dividend yield forecast has slightly declined due to the recent rise in bank stock prices, it remains an attractive figure."

IBK Investment & Securities forecasted the annual average dividend yield for bank stocks this year at 7.5%. Considering only the year-end dividend excluding interim and quarterly dividends, they expected an average dividend yield of 6.0%. The net profit growth rate for this year is projected at 11.9%. Given that the dividend yield forecast for the KOSPI stands at only 2.4%, IBK Investment & Securities evaluates that the dividend yield forecast for bank stocks is significantly higher.

Even when comparing yields from only the year-end dividend excluding interim and quarterly dividends, IBK Investment & Securities diagnosed that bank stocks will show high dividend yields. Looking at detailed stocks, among major banks, Woori Financial Group and Industrial Bank of Korea are expected to have the highest dividend yield forecast at 7.3%. Among regional banks, DGB Financial Group and BNK Financial Group are projected to have dividend yields exceeding 8%.

However, there is also advice that dividend receipt should be decided selectively. This is because bank stocks with high year-end dividend yields may take some time to recover stock prices after the ex-dividend date. Considering this, IBK Investment & Securities suggests that aiming for stock price increases or downside rigidity due to dividend attractiveness until the end of this month can be one investment method. For Shinhan Financial Group and KB Financial Group, where quarterly dividends are becoming established, the ex-dividend shock is expected to be relatively small, making them potentially more suitable for mid- to long-term dividend investment.

Researcher Kim Eungap of IBK Investment & Securities said, "The introduction of interim and quarterly dividends within bank stocks is expected to gradually expand, so concerns about ex-dividend dates will gradually decrease," but added, "Currently, it is a transitional period, so short-term dividend investors need to consider both ex-dividend dates and dividend receipt."