Amid the geopolitical risk from a U.S.-Iran war, the domestic stock market is recording a monthly decline this month. In this situation, analysts in the securities industry said dividend stocks remain an attractive choice when considering dividend income.
Yeom Dong-chan, an analyst at Korea Investment & Securities Co., said, "For dividend stocks, this year's performance is lower than the KOSPI, but considering the dividend income to come, they are sufficiently attractive."
This year's rise in the KOSPI is analyzed to have been driven largely by growth stocks such as Samsung Electronics and SK hynix. It is notable that dividend growth stocks showed better performance than other dividend stocks amid policy support and strength in growth stocks.
Yeom said, "KOSPI dividend growth stocks posted higher returns than the KOSPI in February," adding, "Dividend growth stocks fell by 1.2 percentage points more than the KOSPI in March, but given that the first quarter is when dividends are paid, it is hard to say they were significantly weak."
Looking at past periods when the index rebounded, corporations with growth potential rebounded faster.
Yeom said, "Looking at March performance, the return gap between large caps and small and mid caps is not large, but the difference between value and growth is significant," adding, "Attention is needed for dividend growth stocks, which allow investors to capture both policy-supported dividends and growth, the currently favored factor."
When choosing dividend stocks, factors to consider include: ▲ names eligible for the dividend income tax cut, which stabilizes flows ▲ companies with a record date for dividends at the end of March so that buying now would still receive dividends ▲ corporations in the dividend growth stock category.
He then presented nine corporations that have a dividend record date at the end of March, are eligible for the dividend income tax cut, and are classified as dividend growth stocks: Samsung Card, Samsung Fire & Marine Insurance, SK Gas, LIG Nex1, LG, POSCO International, LS, Amorepacific, and Hankook Tire & Technology.