Samsung May Follow Apple's High-Dividend Path, Says Hana Securities

Samsung Electronics may be on the path to becoming a high-dividend stock, much like Apple's transformation in the past. Analyst Lee Jae-man from Hana Securities believes that if Samsung expands its shareholder returns based on free cash flow, it could regain market leadership and show a similar stock-price pattern to Apple.

The key factor is how Samsung returns its rapidly accumulating free cash flow to shareholders. According to Lee, the company needs to strengthen its shareholder return policy significantly and establish itself as a global tech high-dividend stock. This would enable Samsung to achieve powerful rerating and market leadership like Apple did in the past.

However, for now, Samsung may struggle to outperform the Kospi by a wide margin due to its current valuation discount and lower foreign ownership. The company's shareholder return ratio relative to free cash flow is around 50% for 2024 through 2026, which is relatively low compared to global big tech companies viewed as high-dividend stocks.

Samsung's projected dividend payout ratio is 16% in 2026 and 9% in 2027, lower than Apple's 12%, Microsoft's 18-20%, and TSMC's 23-25%. Lee believes that Samsung can only expect the kind of powerful rerating and market leadership if it sharply strengthens its shareholder return policies.