Daishin Securities recommends buying KT shares for dividend gains

[Courtesy of KT]

Daishin Securities suggested on Wednesday that investors could benefit from both year-end and quarterly dividends by investing in KT Corp.

“KT is the only one among the three telcos that conducts year-end dividends, and will introduce quarterly dividends from 2024 onwards,” Daishin Securities analyst Kim Hoe Jae highlighted in a report. He gave further details of the expected dividends, with the 2023 dividend per share (DPS) at 2,000 won ($1.52), and an expected 2,100 won in 2024. The minimum guaranteed DPS for KT stockholders is estimated at 1,960 won.

“If purchased at the current price and held until the end of March next year, the expected DPS would be 2,525 won, yielding a return of 7.2 percent compared to the December 12, 2023, closing price,” according to Kim.

“After securing the leading position in 5G, KT’s profitability has improved since 2020. Consequently, the company officially announced a dividend payout policy of 50 percent from 2020 to 2022, followed by a 50 percent dividend payout policy from this year to 2025 under the new CEO regime,” he added.

“As of the third quarter of 2023, the profit contribution from the company’s subsidiaries amounted to 130 billion won, surpassing the pre-COVID-19 pandemic level of 100 billion won. In the long term, the steady increase in subsidiary profits could significantly affect KT’s dividend resources.”