Most chaebol seem stingy on dividends

Conglomerates’ average dividend payouts to investors hovered below the market average last year, data showed yesterday, raising concerns over family-owned firms raking in excessive profits.

The average dividend yield ratio came to 1.09 percent for 83 affiliates of the top 10 conglomerates listed on the main bourse, according to market researcher Corporate Governance Service (CGS).

This trails the market average of 1.42 percent tallied by 710 listed firms on the main bourse, the CGS data showed. An additional 13 chaebol affiliates reported zero dividend payouts, it added.

The dividend yield ratio refers to a company’s total annual dividend payments divided by its market capitalization, or the ratio of returns investors receive per share.

The local stock market has proven lucrative for investors as conglomerates compensated their low dividend payouts with growing share prices by using profits to expand corporate investments. But as it is expected to post slow growth, market watchers said firms should expand dividend payouts for a fairer distribution of earnings.

“Family-owned companies are reluctant to give dividend payouts as corporate earnings relate to their assets,” said Lee Ki-ung at the Citizens’ Coalition for Economic Justice.

Yonhap