[Click eStock] "NH Investment & Securities, Dividend Exceeds Expectations... Target Price Maintained"

On the 13th, Kiwoom Securities maintained its buy rating and target price of 15,000 KRW for NH Investment & Securities, stating, "With about two weeks left until the dividend record date, considering a dividend yield of 6.6% and a conservative expected total shareholder return (TSR) of 8.3% for this year, the expected returns both before and after the dividend are at a high level."

Researcher Kim Jae-cheol of Kiwoom Securities explained, "NH Investment & Securities, through a board resolution on the 11th, set the dividend record date as the 29th, with a total dividend of 280.8 billion KRW including common and preferred shares, a dividend per share (DPS) of 800 KRW for common stock, and a DPS of 850 KRW for preferred stock."

He added, "The average dividend yield of companies scheduled for last year's settlement dividends after this date is 3.3%, and among them, the average dividend yield in the financial sector is 4.9%, so NH Investment & Securities' dividend yield of 6.6% exceeds the industry average. With this dividend decision, last year's total dividend payout ratio recorded 50.5%, surpassing the estimated 44.3%."

He continued, "With last year's performance recovery, an increase in DPS, and entering the 50% range of dividend payout ratio including preferred shares, the dividend credibility has been further enhanced. It is also positive that among companies with remaining last year's settlement dividends, a high dividend yield is expected. This year, aligned with the ongoing performance recovery cycle, it is expected to show greater dividend stability."

Researcher Kim noted, "Although there was no history of share repurchases for shareholder value enhancement and cancellation over about 10 years, the announcement of the decision to acquire treasury shares for cancellation this time shows a strong intention to expand shareholder returns. The planned acquisition volume is about 50 billion KRW (4.17 million shares), accounting for approximately 1.25% of the market capitalization. The acquisition is expected to be completed within three months."

He also emphasized, "Attention should be paid to TSR as share repurchases and cancellations are expected to continue. This is the sum of expected returns through dividends and treasury share cancellations. Assuming the announced treasury share acquisition scale, the same controlling shareholder net income as last year, and a DPS of 850 KRW, the conservative expected TSR for this year is 8.3%. If dividend increases based on this year's earnings growth and additional treasury share acquisitions and cancellations occur, a TSR exceeding 9% can be anticipated."