As Samsung Electronics and SK hynix roll out large-scale shareholder return programs, listed companies with significant capacity to expand such programs are drawing growing investor attention. Analysts say whether profit growth translates into dividends and share buybacks and cancellations has emerged as a new investment benchmark.
According to Korea Exchange, shareholder returns among domestic listed companies have been on the rise. The total value of treasury shares acquired by Kospi- and Kosdaq-listed companies grew from 8.2 trillion won ($5.94 billion) in 2023 to 18.8 trillion won in 2024 and 20.1 trillion won last year.
Over the same period, the value of treasury shares canceled more than quadrupled in two years, rising from 4.8 trillion won to 13.9 trillion won and then 21.4 trillion won. Cash dividends also expanded, from 43.1 trillion won in 2023 to 50.9 trillion won last year.
The trend has continued this year. In July alone, 90 listed companies approved cash dividends totaling around 7.4 trillion won. The four major financial holding companies — Shinhan, KB, Hana and Woori Financial Group — announced treasury share cancellations worth hundreds of billions of won following their earnings releases, while Naver and Mirae Asset Securities each launched shareholder return programs using treasury shares worth around 1 trillion won and 500 billion won, respectively.
More recently, SK hynix approved a 40 trillion won share buyback and cancellation program, while Samsung Electronics announced a shareholder return policy worth up to 110 trillion won.
Market attention is now shifting to who moves next. KB Financial Group and SK Telecom, both known for maintaining high levels of shareholder returns, are among the most closely watched names.
According to Kiwoom Securities, KB Financial Group's total shareholder return for this year is projected to reach around 3.7 trillion won, with a total shareholder return ratio of 57 percent. Of the 880 billion won set aside for second-half shareholder returns, KB Financial has decided to allocate 700 billion won to share buybacks and cancellations. The remaining 180 billion won is expected to be considered for additional buybacks or cash dividends.
SK Telecom is expected to channel improving earnings directly into expanded shareholder returns. The company has been running a dividend policy since 2024 that commits to returning at least 50 percent of adjusted net profit for the period — on a consolidated basis — to shareholders through 2026.
"Based on first-half earnings, SK Telecom is on track to achieve annual consolidated operating profit of around 2 trillion won this year," said Kim Hong-sik, an analyst at Hana Securities. "With solid results enabling tax-free dividends in the fourth quarter, the company could pay a high quarterly dividend of up to 1,050 won per share after tax."
The shareholder return expansions at Samsung Electronics and SK hynix have also renewed focus on return policies across their respective group affiliates. Samsung C&T in particular is seen as a beneficiary of Samsung Electronics' special dividend, as the resulting increase in dividend income could flow through to expanded shareholder returns at Samsung C&T.
"If Samsung Electronics pays out 30 trillion won in dividends in the third quarter, Samsung C&T's dividend income from Samsung Electronics — covering the fourth quarter of last year through the third quarter of this year — is projected to reach 1.7 trillion won," said Choe Gwan-sun, an analyst at SK Securities.
Choe estimated that applying a redistribution ratio of 70 percent, Samsung C&T's dividend per share for this year could reach 8,550 won — nearly double the current market consensus of 4,477 won.
Samsung C&T plans to return 60 to 70 percent of affiliate dividend income to shareholders from this year through 2028, with a minimum dividend per share set at 2,500 won.
SK Square will use at least 30 percent of recurring dividend income, plus a portion of investment returns, as the source of shareholder returns from this year through 2028. Any treasury shares acquired will be fully canceled or distributed as cash dividends.
The company paid a dividend of 1,500 won per share — totaling 204.3 billion won — in June. It also plans to buy back 40 billion won worth of treasury shares this year and 70 billion won next year.
"As Samsung Electronics and SK hynix establish a clear precedent of returning profits to shareholders, expectations for expanded shareholder returns are spreading to other large listed companies," said Kim Jong-min, an analyst at Samsung Securities. "The benchmark for evaluating the Korean stock market is shifting from a simple earnings 'cycle' to a shareholder value return 'trend.'"
moon@heraldcorp.com
