The old Korean stock market adage "buy dividend stocks when cold winds blow" is becoming obsolete as listed companies increasingly adopt policies allowing investors to confirm dividend amounts before making investment decisions.
With the introduction of a separate taxation policy for dividend income starting next year, analysts say investors need to carefully examine dividend record dates and dividend policies when investing in dividend stocks.
According to the Financial Supervisory Service's electronic disclosure system, approximately 70 companies—59 listed on the main KOSPI market and 12 on KOSDAQ—announced this month that they have amended their articles of incorporation to change the dividend record date from "the end of each fiscal year (December 31)" to "a date determined by the board of directors."
Major listed companies including LG Chem (051910.KS), POSCO Holdings (005490.KS), and DL E&C have made the change, along with financial and securities firms such as KB Financial Group (105560.KS) and Mirae Asset Securities (006800.KS).
The government revised regulations in 2023 to require companies to finalize and disclose dividend amounts before the dividend record date. The measure aims to eliminate "blind dividends," where investors had to make decisions without knowing how much they would receive since dividend amounts were determined after the record date.
According to the Korea Listed Companies Association and the KOSDAQ Association, 1,137 companies—representing 46.4% of all listed firms—had completed amendments to their articles of incorporation regarding dividend record dates as of April this year. The number is expected to grow as more companies make additional changes ahead of year-end settlements.
Investors should note that companies that have changed their dividend record dates will not pay 2025 fiscal year dividends to shareholders recorded in the shareholder registry as of the end of December. Since dividend amounts and record dates will be announced at board meetings early next year, investors must closely monitor disclosures. Some companies that amended their articles may still choose not to participate in the "decide first, invest later" system, requiring additional verification.
Dividend investors should also pay attention to the separate taxation of dividend income taking effect next year. The policy applies to dividends paid on or after January 1 next year, meaning investors recorded in the shareholder registry at the end of December this year can also benefit from the separate taxation. To be recorded in the December-end shareholder registry, investors must purchase shares by December 26.
The challenge is that actual eligibility for separate taxation is determined only after the shareholders' meeting. The process proceeds in order: setting the dividend record date, provisional disclosure of dividends, confirmation of dividends at the shareholders' meeting, disclosure of separate taxation applicability, and dividend payment.
"Investors seeking dividend income need to consider corporate net profit, dividend payout ratios, and past dividend policies at year-end," said Kim Jong-young, a researcher at NH Investment & Securities. "Since payout ratios fluctuate more with changes in net profit than with dividend amounts, investors should focus on companies with low earnings volatility."
