As the year-end dividend season approaches, the securities industry is actively sifting through dividend stocks, carefully evaluating not only dividend yields but also potential stock price appreciation and tax benefits.
According to NH Investment & Securities on the 10th, recommended dividend sectors this year, considering factors such as dividends, tax benefits, and shareholder return rates, are △semiconductors △banks △insurance △securities △telecommunications △media △retail and food & beverage △consumer goods △automobiles, and △transportation.
An Jae-min, a researcher at NH Investment & Securities, stated, “These sectors will be able to enjoy not only dividend income but also capital gains simultaneously, based on solid fundamentals and cash-generating capabilities during the dividend season and the medium- to long-term expansion of shareholder returns.” He emphasized, “While rising interest rates have reduced the appeal of dividend stock investments compared to the past when considering simple dividend yields alone, sectors and companies that actively implement shareholder return policies, like these, still hold high investment appeal.”
In the semiconductor sector, Samsung Electronics and SK Hynix were recommended. Samsung Electronics approved a shareholder return plan worth approximately 9 trillion to 11 trillion won this year. Based on its shareholder return policy for 2024–2026, cumulative free cash flow (FCF) is estimated at 266 trillion won, of which 50%, or 133 trillion won, will be used as a source for shareholder returns. Samsung Electronics is also a high-dividend company that meets the requirements for separate taxation of dividend income this year.
Researcher An estimated, “The shareholder return resources available for execution this year are estimated at approximately 9.7 trillion won. The company plans to prioritize cash dividends of about 3 trillion won, including the regular Q3 dividend, with the remainder to be decided by the board of directors in January next year.” He projected, “Samsung Electronics’ annual dividend per share will be 10,380 won this year.”
SK Hynix is expected to use approximately 7 trillion won, or 50% of its estimated FCF for this year, for shareholder returns. Researcher An predicted, “Of the remaining 3 trillion won after excluding a 4 trillion won share buyback, around 2 trillion won will be distributed as special dividends.” The annual dividend per share for SK Hynix presented by NH Investment & Securities is 28,500 won.
In banking, Woori Financial Group, KB Financial, JB Financial Group, BNK Financial Group, and KakaoBank were recommended. Most bank stocks can receive tax benefits on dividend income, and Woori Financial Group and KB Financial, among others, will receive tax-exempt benefits on dividends paid this year. Additionally, during periods of rising interest rates, bank stocks have a high potential for performance improvement due to increased interest income, allowing for stable shareholder returns based on this.
In insurance, Samsung Life, Samsung Fire & Marine Insurance, and DB Insurance are expected to simultaneously benefit from rising interest rates and high dividends. In particular, DB Insurance has an estimated dividend yield of 4.9% this year, the highest among major insurance stocks, and plans to increase its dividend per share by more than 10% annually until 2030. Samsung Life and Samsung Fire & Marine Insurance can secure shareholder return resources based on profits related to their stakes in Samsung Electronics. All three companies receive separate taxation benefits for dividend income.
In the securities sector, Hanwha Financial Group, Samsung Securities, and Kiwoom Securities are mentioned. This is because recent sharp corrections in securities stock prices have highlighted their dividend appeal. They also already met the requirements for separate taxation of dividend income last year. NH Investment & Securities projected this year’s dividend per share at 13,000 won for Hanwha Financial Group, and 6,500 won and 21,500 won for Samsung Life and Samsung Fire & Marine Insurance, respectively.
In telecommunications, a representative dividend sector, KT and LG Uplus were recommended. KT decided to conduct share buybacks and cancellations totaling 1 trillion won over the next four years starting this year, while LG Uplus is expanding its annual share buyback size from 80 billion won last year to 90 billion won this year. Both KT and LG Uplus are companies eligible for separate taxation of dividend income.
Additionally, in media, Nasmedia, Incross, and Cheil Worldwide were recommended, as they have maintained a shareholder return policy based on high dividends for a long period and have recently been active in share buybacks and cancellations. In retail and food & beverage, Lotte Shopping and Shinsegae are expected to expand dividends due to performance improvements. In consumer goods, A.P.R., Amorepacific, and Cosmax were recommended as their shareholder return sizes increase alongside strong cosmetics exports.
In the automotive sector, Hyundai Motor was recommended because it is maintaining its shareholder return policy even in an environment where earnings volatility has expanded due to factors such as tariffs. In transportation, Pan Ocean and Hyundai Glovis were mentioned as annual profits increased due to rising freight rates from geopolitical issues.
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