Samsung Electronics' headquarters in Suwon, Gyeonggi on July 30.YONHAP
Samsung Electronics' new shareholder return policy, which the company is expected to announce soon, could run between 100 trillion won and 200 trillion won ($71 billion and $142 billion) a year, KB Securities said Monday.
Its current annual program is 9.8 trillion won, so even the low end would be a more than 10-fold increase.
"Even if the shareholder return is set at the minimum of 100 trillion won, the dividend yield could exceed 7 percent at the current share price," Kim Dong-won, head of KB Securities' research center, said. "A large-scale shareholder return will be the key trigger for a rerating of Samsung Electronics shares."
KB Securities kept its buy rating and its target price of 600,000 won.
Samsung has already left the door open to a bigger payout.
Reporting second quarter earnings on July 30, the company said its board and management were "actively discussing how to carry out this year's shareholder return policy, including a special dividend, along with the policy that follows it."
SK hynix has signaled more as well. Announcing a quarterly dividend of 375 won per common share on Friday, it said it was "reviewing additional measures to lift shareholder value and would finalize and announce them during the third quarter."
A visitor holds up a Galaxy Z Flip8, Galaxy Z Fold8 Ultra and Galaxy Z Fold8 at Samsung Gangnam in southern Seoul's Seocho District on July 23.YONHAP
Citi urged SK hynix to move before then. In a note last week reiterating a buy rating, the bank's strategists said they expect a shareholder return program to be announced ahead of third quarter earnings.
"We anticipate hynix to share constructive market outlook as well as decent shareholder returns," Citi said.
Analysts see the two policies as a possible turning point for foreign investor sentiment. Neither stock has found a clear direction since July, and both have been trading in a range.
"A clear stance on capital allocation is imperative, in our view, to restore stock sentiment," J.P. Morgan analyst Jay Kwon said Wednesday.
SK hynix headquarters are seen behind a traffic light on July 29.NEWS1
The size of the cash pile is part of the argument. By Reuters' own calculation from LSEG data, Samsung Electronics and SK hynix are on course to end the year holding $263 billion between them, more than twice Nvidia's estimated $102 billion and more than the other six "Magnificent Seven" companies hold combined — and yet they still refuse to give a detailed blueprint.
"Samsung Electronics and SK hynix face growing calls from investors wanting a greater share of excess cash via dividends or buybacks," Reuters said.
BY JANG SEO-YUN [cho.yongjun1@joongang.co.kr]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
