Samsung had $17 billion in cash while Hyundai Motor had $7.4 billion and KB Financial had $8.3 billion, according to Bloomberg. Yet the highest yielder of the group is KB Financial at 1.3%. The three stocks combine for 27.5% of HKOR’s weight and 27.8% of EWY. Samsung and Hyundai combine for 15% of DXKW. [Opportunity With South Korea ETFs]
Samsung’s 2013 payout ratio of 12% was one of the lowest among South Korean large-caps. “South Korea’s dividend payout ratio ― the percentage of total dividends divided by net income ― stands at 22.4 percent, far below the global average of 47.7 percent,” the Korea Herald reported, citing Korea Exchange data.
Low payout ratios indicate South Korea and the aforementioned have a long way to go to catch up to China and Taiwan. As a result, South Korea ETFs could, in the future, be dividend growth ideas for conservative emerging markets investors.
China is the largest emerging markets dividend payer in dollar terms and has shown notable dividend growth over the past 12 to 18 months. Taiwan has long had one of the most impressive dividend policies in the developing world. [China’s Dividend Growth]
Horizons Korea KOSPI 200 ETF