Samsung Electronics is maintaining a high dividend payout policy despite a sharp drop in its profits.
Samsung Electronics has decided to pay quarterly dividends of 2.404 trillion won in the first quarter of this year, according to the electronic disclosure system of the Financial Supervisory Service (FSS) on June 9.
Since last year, Samsung Electronics has been paying more than 2 trillion won in dividends each quarter to enhance shareholder value. The tech giant paid dividends four times in 2018, with the aggregate payouts reaching 9.6 trillion won, up 65 percent from 5.8 trillion won in 2017. Samsung Electronics plans to pay the same amount of dividends this year.
Stock market analysts believe that Samsung Electronics is providing a floor for its stock price with an aggressive dividend policy. In particular, they say that the company is preventing investment sentiment from shrinking through the dividend policy at a time when its profit plummeted due to a slump in the semiconductor business in the first quarter.
Samsung Electronics’ sales and operating profit in the second quarter of this year reached 54.15 trillion won and 6.04 trillion won, respectively, down 7.40 percent and 59.40 percent, financial information company FN Guide said. Its annual operating profit is expected to fall 51.94 percent on year to 28,302.8 billion won.
Samsung Electronics shares have been recovering recently. Its stock price rose from 41,800 won on May 29 to 44,000 won on June 7, a jump of 5 percent. It was boosted by expectations that the company would benefit from the U.S. government’s mounting pressure on Huawei.―Business Korea