The deadline for year-end dividends is near. This year, the 29th is the ex-dividend date, so the 28th is the last trading day to receive year-end dividends after buying the stock. Experts analyze that the attractiveness of investing in high dividend stocks still exists even when considering the average adjustment range for ex-dividend dates. However, it is explained that financial stocks classified as traditional high-dividend sectors need to consider alternatives as the Financial Supervisory Service is pressing this year to reduce its dividend payout ratio.
Dividend of 27.2 trillion won this year
According to Kyobo Securities on the 25th, the estimated cash dividend of 198 listed companies that make up the KOSPI 200 index this year is about 27.2 trillion won. The average dividend yield based on the market cap of the KOSPI 200 on the 24th (1697 trillion 501.3 billion won) is 1.60%. This means that if you buy any stock included in the KOSPI 200 index on the 28th, you can expect a much higher level of dividend than the market interest rate.
The question is whether to adjust the ex-dividend date on the 29th this year. Usually, on the ex-dividend date, stock prices decline, focusing on high dividend stocks, reflecting the disappearance of dividend rights. Last year’s ex-dividend date (December 27, 2019), the KOSPI 200 high dividend index fell 2.23%. It is explained that it is necessary to buy stocks with attractive dividend yields that are expected to offset the decline in dividends, or stocks with positive long-term stock price outlooks to avoid’small exploration’.
Bank stocks increase uncertainty
Financial sectors such as banks, securities, and cards have traditionally been dominated by high dividend stocks with high dividend yields. According to F&Guide, a financial information company, there are a total of 224 listed companies whose dividend per share forecast is presented by three or more securities companies. It is an analysis that 32 of these companies are expected to earn more than 4% of dividend income. Hana Financial Group(35,800 +2.58%)(Expected dividend yield of 5.81%) is the highest, and Hyundai Heavy Industries Holdings(313,500 +2.79%)(5.77%), Industrial Bank(9,450 +1.07%)(5.60%) JB Financial Group(5,870 -0.84%)(5.54%) BNK Financial Group(5,940 +2.24%)(5.54%) were followed by financial companies and holding companies.
There are also opinions that it is difficult to expect last year’s level of dividend income as the financial authorities pushed the financial sector to cut dividends. Financial Supervisory Commissioner Yoon Seok-heon on the 23rd said at a press conference, “If we pay a lot of dividends this year, banks may suffer from insufficient capital capacity next year.” According to Kiwoom Securities, the dividend payout ratio of financial holding companies last year was 26-27% of net profit. If this is pulled down to around 20%, their dividend yield will fall by an average of 1 percentage point.
Financial stock alternative is performance stock
As an alternative to financial stocks where concerns exist, experts recommend buying stocks with solid earnings outlook and stock price flow rather than simply choosing stocks based on the expected dividend yield. Even if the expected dividend yield is relatively low, the outlook for next year’s earnings is bright, and the stocks that increase their dividend payout ratio every year have a smaller adjustment for the ex-date and stable long-term share price flow. Kyobo Securities researcher Kang Hyun-jeong said, “KT&G(88,400 +0.91%)(Estimated dividend yield 5.20%) and Samsung Card(35,250 +1.88%)(4.95%), NCsoft(897,000 +1.01%)(0.74%), KEPCO(27,000 +0.75%)(2.89%) and CJ (2.15%) are stable dividend stocks that satisfy these conditions.”
Reporter Jeon Beomjin [email protected]
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