As stock market volatility has widened recently, investors are focusing on stocks with stable cash flow and dividend appeal. In particular, UIL, a specialist in electronic device components, is drawing attention from the market as it unveils strong shareholder-return measures, including a high-dividend policy and the cancellation of treasury shares.
Founded in 1982 and listed on the KOSDAQ market in 2001, UIL is exclusively supplying USIM trays for the initial batch of Samsung Electronics' new "Galaxy S26" model, extending its improvement in results. It is also positive that the company has expanded its business portfolio into automotive components and e-cigarettes. UIL's operating profit last year rose 25% from a year earlier to 26.4 billion won.
At the end of on the last, UIL announced a plan to enhance corporate value, proposing ▲ strengthening production efficiency based on automation and improving the profit structure ▲ expanding and diversifying the business portfolio ▲ operating a stable and sustainable dividends policy.
In particular, it plans to improve productivity by expanding automotive facilities and streamlining processes, and to enhance profitability by improving fixed and variable cost structures. In addition, by pursuing mergers and acquisitions (M&A) and strategic investments, it set a plan to reach 1 trillion won in annual sales within five years.
UIL is implementing comprehensive shareholder returns such as canceling treasury shares and expanding dividends. In Mar., it canceled all 1.4 million treasury shares (worth about 6.5 billion won) excluding those for employee compensation. Canceling treasury shares reduces the total number of shares outstanding and is a representative stock-boosting measure that raises earnings per share (EPS).
The company also set a target dividend yield on market price of around 9% this year. UIL had suspended dividends from 2021 to 2024 due to the impact of COVID-19 and the economic downturn. However, after resuming year-end and interim dividends last year, it was immediately selected by the Korea Exchange (KRX) as a high-dividend corporation this year.
A high-dividend corporation refers to a listed company with a payout ratio (the share of net income paid as dividends) of 40% or more, or a payout ratio of 25% or more with dividends up more than 10% from a year earlier. Under the "separate taxation for high-dividend corporations" system introduced this year, UIL investors can have a separate lower tax rate (14%–30%) applied to dividend income without aggregation into comprehensive taxation.
UIL's payout ratio for the 2025 fiscal year is 57.4%, placing it in the top 30% (88th) among 290 small and mid-size corporations with a market capitalization under 300 billion won. Profit dividends, which distribute a portion of the profits corporations earn to shareholders, increased 46.8% in one year, from 8.5 billion won to 12.5 billion won.
The strong shareholder-return policy is translating into a rising share price. So far this year, UIL's stock has risen about 20%, far outpacing the KOSDAQ index gain of 12% over the same period. Even so, the current price-to-book ratio (PBR) is only 0.61 times, and some analysts say the stock remains severely undervalued.
Lee Chung-heon, a researcher at the independent research firm ValueFinder, said, "UIL has positive momentum (upside potential), including stable core-business profitability, a debt-free management level and ample cash-equivalent assets of about 82 billion won, and an undervalued price-to-earnings ratio (PER) of 5.6 times."
Lee added, "In particular, the proactive shareholder-return strategy is highly likely to serve as a key factor in the corporate value re-rating."