Kosdaq’s small caps more generous with dividends
Small-cap companies listed on the secondary Kosdaq appeared more prone to giving out stock dividends to their shareholders than larger companies on the Kospi, according to a Corporate Governance Service report on Tuesday.The nonprofit organization studied the dividend payment records of listed companies from 2012 through 2014, finding that 50 companies paid out dividends 98 times.
In the three years, 18 Kospi-listed companies made 37 payments, while 32 Kosdaq-listed companies paid 61 times.
Nearly half of the 50 companies distributed dividends once over the three year period, while the rest did so every year.
By industry, pharmaceutical, electronic device parts and machinery were the three most active industries in paying dividends.
Drug makers on both markets were more likely to pay dividends in stocks rather than cash.
In 2014, 3 percent of Kospi-listed companies distributed stock dividends, while 4.2 percent of Kosdaq companies did so.
Large companies on the Kospi were more likely to pay dividends in cash. Smaller companies on the Kosdaq tended to pay dividends in stocks.
However, overall dividend transactions increased over the three years on both the Kospi and Kosdaq. The number of Kospi-listed companies paying stock dividends steadily increased from nine companies in 2012, to 13 in 2013 and to 15 last year.
Thirty-five companies last year distributed stock dividends -11 companies on the Kospi and 24 on the Kosdaq.
Examples of Kospi-listed companies paying dividends in stocks include Mirae Asset Securities, SK Gas and the local cosmetics maker Able C&C.
Stock dividends help small companies to save cash, an analyst from the CGS explained, while simultaneously assuring investors that the companies are doing well to stimulate investment.
Giving out dividends in stocks is not reflected in performance in the same quarter as it’s when distributed, unlike cash dividends.
BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]
with the Korea JoongAng Daily
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