Korean firms’ dividend yield ratio hits 3-year low: data

Dividend payouts by South Korean listed firms to investors remained poor last year, with their dividend yield ratio hitting the lowest level in 3 years, data showed Monday.

The average dividend yield ratio of listed firms that closed their books on Dec. 31 came to 1.14 percent in 2013, marking the lowest tally since 2010, when the comparable figure was 1.12 percent, according to data compiled by Daishin Securities.

The dividend yield ratio refers to a company’s annual dividend payments per share divided by its share price, or the ratio of returns investors receive per share. A low ratio usually means that a company is retaining cash or increasing capital spending.

“Local companies are still attractive compared to foreign rivals, but low dividend payouts in part make investors go after short-term investment,” said Jang Joon-phil, an analyst at Daishin Securities.

He said an increase in dividend payouts would help the local stock market attract more long-term investors, which in turn would propel the market. (Yonhap)