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As of 10:40 am on the 28th, Samsung Life’s stock price is 82,400 won, which is a 0.37% increase from the previous trading day (closed on the 24th). Samsung Life’s share price rose 13.2% (based on the closing price on the 24th) this month alone. Compared to 31,900 won on March 19, which recorded the lowest point this year, it rose by 157.3%.
Samsung Life’s recent share price rise seems to be due to the increasing demand to receive settlement dividends as the dividend decline (29th) approaches. After the inheritance tax on the shares of the late Chairman Lee Kun-hee was set at 11,388 trillion won, expectations have increased that’the company will expand dividends to subsidiaries to raise inheritance funds’. Experts believe that, assuming that Chairman Lee’s family will pay the inheritance tax in installments for five years, it will require about 2 trillion won of funds each year.
According to the electronic disclosure system of the Financial Supervisory Service, the late Chairman Lee’s shares of Samsung Group affiliates are 249.27 million shares of Samsung Electronics (4.18% stake), 610,000 shares (0.08%) of Samsung Electronics, 4151 million shares of Samsung Life (20.76%), and 542 of Samsung C&T. Manchuria (2.88%) and Samsung SDS 9701 (0.01%).
Currently, the business community expects that the late Chairman Lee’s family will be able to raise funds worth KRW 1 trillion through dividends from Samsung Electronics. The share price of Samsung Electronics is already on a high pace as expectations for regular dividends and special dividends are growing. Currently, the special dividend is expected to be 1,000 won per common stock. In this case, the dividend for the late Chairman Lee’s stock is 800 billion won, and the dividend for the shares owned by the family can be approximately 1 trillion won.
Following Samsung Electronics, the dividend of Samsung Life, which has a large stake in the late Chairman Lee, is inevitably attracting attention. The total number of Samsung Life Insurance and the stake in related parties are 20.82%. Earlier, Samsung Life revealed its shareholder return policy last year and announced that it would increase its dividend payout ratio to 50% for three years. In the conference call in the third quarter, he said, “This year, the dividend payout ratio will be higher than last year.” Samsung Life’s dividend payout ratio increased from 30% in 2018 to 37% in 2019. Samsung Life Insurance paid 2,650 won per common share as a settlement dividend last year, a total of 476 billion won. The securities industry expects the dividend payout ratio to expand to more than 40% this year. However, Samsung Life said, “Until the board of directors is held, the size and disposition of dividends cannot be confirmed and revealed.”
However, on the one hand, there is also a prospect that the expansion of Samsung Life’s dividend payout ratio will not be large this year. Unlike the manufacturing industry, insurance companies’ products consist of consumer premiums, so it is difficult to rapidly expand dividends. In addition, it is explained that the recent strong recommendation of the financial authorities to request dividends from financial companies will have an effect.
“It is difficult to affirm that it will increase the dividend,” said Jung Tae-joon, a researcher at Yuanta Securities. “Since Samsung Life has announced that it will pay dividends through the financial resources after Samsung Electronics’ dividends are made, it is difficult to see that the dividend will increase immediately.”
DB Financial Investment Researcher Lee Byung-gun also said, “In the case of financial companies and insurance companies, you cannot just look at cash flows like manufacturing. It is a mistake to calculate that dividends will be possible based on cash flows only because all they have is cash.” “Insurers have basic liquidity ratios, subsidiary investment limits, and solvency ratio (RBC). ), etc. should be considered comprehensively.”
“The financial authorities’ recommendation to refrain from paying dividends will also have an impact. The financial authorities’ request for dividends itself may have an impact on Corona 19, but it is interpreted as saying that insurance companies are procrastinating because they have IFRS17 ahead.