Analysts recommend stable and high-dividend stocks amid market volatility

An image generated by ChatGPT illustrating the Korean stock market moving within a box range. (Image Source: DALL·E)

As South Korea’s Kospi continues to decline, analysts predict a volatile stock market through 2025, advising investors to focus on stocks with stable earnings growth or high dividend yields.

According to industry sources on Sunday, eight South Korean securities firms—including Kyobo Securities, Shinyoung Securities, Korea Investment & Securities, Hanwha Investment & Securities, Heungkuk Securities, DB Financial Investment, LS Securities, and SK Securities—forecasted Kospi’s 2025 range between 2,333 and 2,931 points. This wide range reflects anticipated market instability.

Kang Min-seok, an analyst at Kyobo Securities, said, “We’ve set a 2025 Kospi range of 2,300 to 3,000 points, which underscores the difficulty in providing a precise forecast amid high volatility.”

The semiconductor, secondary battery, and biotech sectors—key drivers of the domestic market this year—are expected to continue influencing the market in 2025. However, outside of biotech, experts see limited growth potential in these sectors. Hwang Jee-woo, an analyst at SK Securities, explained, “We’re cautious about secondary batteries due to concerns over oversupply and profitability issues, and while AI-driven demand supports semiconductors, inventory adjustments and legacy sector challenges will take time to resolve.”

The overvaluation of U.S. equities may also affect South Korean markets. Kang Hyun-ki, an analyst at DB Financial Investment, warned, “U.S. stock prices are at one of their highest historical levels, which could trigger a downturn impacting South Korean stocks.”

In this uncertain environment, experts recommend focusing on stocks with consistent earnings growth. Shin Seung-ho, head of research at LS Securities, advised investing in companies with steady performance over recent years, recommending stocks like KB Securities, Meritz Financial Group, HD Hyundai Marine Solution, Coway, and Classys.

With South Korean individual investors increasingly shifting their investments overseas, analysts also suggest high-dividend stocks. Lee Kyung-soo, an analyst at Hana Securities, noted, “As retail trading volume in the South Korean market decreases, institutional influence grows, benefiting high-dividend stocks.”

For specific high-dividend stocks expected to post earnings growth next year, the analyst recommended Lotte Corporation, HD Hyundai Marine Solution, SK gas, Emart, and HD Hyundai.