South Korea’s state-run and single largest institutional player National Pension Service (NPS) has decisively upped assertiveness as the biggest stock investor by listing stingy companies and warning of tough actions if dividend payouts do not improve.

The NPS rejected financial reports of 21 companies in shareholders’ meetings in March in disapproval of their dividend policies. Last year it had been 17. It also listed up the stingiest and sent individual warnings that if their payouts do not improve over the year it could go public with the list.

According to the financial investment circles on Tuesday, the NPS last month sent out initial warnings to companies singled out for poor payouts for two consecutive years. The listed companies that received vetoes in shareholders meetings for two straight years were Gwangju Shinsegae Co., CJ E&M Corp., Lotte Food Co., Seegene Inc., Chosun Welding Pohang Co., Com2uS Corp., Kolao Holdings, TK Corp., Korea Alcohol Industrial and Hyundai Green Food Co. Lotte Food and Kolao Holdings upped payouts this year payouts from last year but they still fell short of expectations.

Companies that newly joined the list include Namyang Dairy Products Co. with 3.2 percent dividend propensity, DRB Industrial Co. with 3.7 percent and Neowiz Holdings Corp. with 5.9 percent, all far below the average 17 percent payout by Korea’s publicly traded companies.

The NPS also watches dividend yield, payout relative to the share price. It thumbed its nose at Minwise Co., SFC Co. and ADTechnology Co. although they offered high payout ratio because their divided yield was relatively low against their stock performance.

According to Korea Exchange (KRX), the average stock dividend yielded 1.74 percent last year, exceeding1.698 percent yield of Korean one-year government bond for the first time in five years. Dividend yield of Minwise and SFC stood at 1.1 percent and 0.8 percent, respectively, hovering below the average.

By Chun Jung-hong, Chae Jong-won

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