South Korean companies listed on the country’s main Kospi market paid out record-high 20.9 trillion won ($18.3 billion) in their combined annual cash dividends last year as more firms have joined to return profits to shareholders than before amid growing demand to improve shareholder value.

According to securities exchange operator Korea Exchange (KRX) on Wednesday, 522 companies, or 72.0 percent, of the total 725 companies listed on the Kospi bourse disclosed cash dividend payments in a regulatory filing in 2016. Their combined dividend payout amounted to 20.9 trillion won, up 9.5 percent from a year ago, and this was the first time for Korean companies’ total dividend payment to exceed 20 trillion won.

The number of Kospi-listed companies paying cash dividends has increased in recent years. In 2012, 62.0 percent of the total Kospi-listed companies paid out cash dividends but more than 70 percent firms paid out dividends in 2016. The dividend payout that amounted at 11.1 trillion won in 2012 also nearly doubled to more than 20 trillion won in 2016.

Their dividend yield, a ratio of annual dividends per share against a firm’s share price (common stock based), averaged 1.80 percent last year, higher than the 1.433 percent yield on one-year government bond. The stock dividend yield has surpassed the government’s bond yield for two years in a row. Out of the 522 Kospi-listed companies that paid out cash dividends last year, a 52.9 percent, or 276 companies, had their dividend yield outpace that of the government bonds.

The dividend payout ratio - the percentage of net income a firm pays to its shareholders in dividends - of the Kospi-listed companies was 34.44 percent, slightly up from 34.39 percent in the previous year.

Last year’s annual cash dividend paid out by firms listed on the country’s secondary Kosdaq market also expanded. A total of 502 companies listed on the Kosdaq market paid out cash dividends with the total amount of dividend payment reaching 1.3 trillion won, up 12 percent from a year ago. The dividend yield of the Kosdaq-listed firms recorded 1.52 percent last year, beating the government bond yields for the first time. The dividend payout ratio has continued to rise over the past five years and reached 28.86 percent last year.

By Han Ye-kyung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]