[Edaily Reporter kyoungeun kim ] With semiconductor companies making a series of announcements regarding shareholder returns, investor attention is focused on whether these returns can serve as a catalyst to drive up stock prices. However, analysts suggest that the key lies not in the scale of one-time returns, but in the process of demonstrating—through time and concrete figures—a commitment to prioritizing shareholders regardless of market conditions.
Kim Min-kyu, an analyst at KB Securities, stated in a strategy report published on the 1st, “Looking at the examples of Apple and Taiwan’s TSMC, shareholder returns are clearly the best strategy for driving stock prices up steadily and strongly over the long term,” adding, “However, there is one condition: clear trust.”
◇Apple Resumes Dividends After a 16-Year Hiatus, Shifting to Stock Buybacks… “Stock Buybacks and Dividend Growth” Prove Effective
Apple paid dividends from 1987 to 1995 but suspended them in 1996 due to sluggish sales. Steve Jobs, who returned as Apple’s CEO in 1997, maintained a policy of hoarding cash instead of paying dividends until his death in 2011.
This is a strategic choice to retain and reinvest profits when the return on invested capital (ROIC) exceeds the weighted average cost of capital (WACC). If the rate of return (ROIC) a company earns by reinvesting funds in new businesses or facilities is higher than the cost of raising that capital (WACC), reinvestment can be a decision that enhances corporate value.
For example, if it costs a company 8% per year to borrow 10 billion won or raise funds from shareholders, but it can earn 12% by investing that 10 billion won in its business, it generates a 4 percentage point excess return. In this case, it is difficult to argue that the policy of retaining earnings within the company and reinvesting them in growth initiatives—rather than distributing cash through dividends—was wrong.
The tide began to turn with Tim Cook, who took office as CEO in 2012. Tim Cook resumed dividend payments and share buybacks. While the initial purpose was to compensate employees, starting in 2013, the company began actively using share buybacks as a means of shareholder returns.
Researcher Kim stated, “Apple announced a large-scale share buyback amid slowing smartphone growth, which had led to a slowdown in earnings growth and a 40% drop in the stock price from $25 to $15,” adding, “This provided the catalyst for a rebound, even despite the downward revision in guidance.” He continued, “While growth has clearly slowed compared to the past, shareholders’ share of profits has continued to increase,” citing the fact that earnings per share (EPS) growth outpaced net income growth.
Researcher Kim explained that in the U.S., there are various investable indices based on different forms of shareholder returns, which can be used to identify the return methods preferred by the market. “Companies that have consistently returned value to shareholders by reducing the actual number of outstanding shares through share buybacks and cancellations have shown superior long-term performance compared to those that simply purchase large quantities of their own shares,” he said, adding, “Similarly, ‘dividend growth’ stocks—those that steadily increase dividends—perform better than stocks with high dividend yields.”
He added, “Ultimately, the trust that a company will steadily increase shareholder returns is more important than the scale of a one-time return,” noting, “This is also significant for South Korea, where the importance of shareholder returns is once again coming to the fore.”

◇TSMC Has Kept Its Promise to “Not Reduce DPS” for 15 Years
If Apple is a prime example of share buybacks, TSMC is a prime example of dividends. TSMC, which maintained a fixed dividend policy until 2014, raised its dividend per share (DPS) by 50% in 2015 and formally documented its dividend policy. Subsequently, having weathered several cycles of boom and bust in the semiconductor industry and gained confidence in the stability of its profits, TSMC announced a policy in 2019 stating that it would “return 70% of free cash flow (FCF) as quarterly dividends and not reduce the DPS.”
Analyst Kim stated, “This promise was upheld even during the 2019 and 2023 downturns, when TSMC itself experienced a decline in profits.”
He continued, “The reason TSMC’s valuation was re-rated last August was not because its earnings ceiling was broken during the boom, but because it proved that its earnings floor was protected during the downturn,” adding, “The same applies to shareholder returns. Rather than simply focusing on shareholder returns during good times, proving through numbers that the company prioritizes shareholders even when conditions are poor is the process that turns shareholder returns into a catalyst for stock price growth,” he emphasized.
◇Are there stocks in Korea that are building trust through “share buybacks” and “dividend growth”?
The report noted that even in the Korean stock market—which is often viewed as lacking in shareholder returns—there are individual companies that have built trust in shareholder returns over the long term.
Companies that have conducted share buybacks for shareholder return purposes in at least two of the past three years include SamsungElectronics(005930), HyundaiMotor(005380), KIA CORPORATION(000270), LG Corp.(003550), POSCO Holdings Inc.(005490), Celltrion(068270), and ShinhanFinancialGroup Co.,Ltd.(055550).
In particular, SamsungElectronics(005930)was reported to have spent 8.0075 trillion won on share buybacks (shareholder returns) in 2025.
Stocks that have not reduced their DPS consecutively—and thus resemble “dividend growth” stocks—were also highlighted. DONGSUH(026960), SKGas(018670), #KT&G Corporation, Ottogi(007310), LG Corp.(003550), and HYUNDAIDEPARTMENTSTORECO.,LTD(069960)have not reduced their DPS for 23 consecutive years, while HYUNDAIGLOVIS Co.,LTD(086280)(21 years), HansolChemical(014680)(18 years), and HyundaiMobis(012330)(17 years) were also cited as stocks that have maintained or expanded dividends over the long term.
Researcher Kim explained, “In a period of high interest rates like the present, stocks that simply offer high dividend yields or merely maintain their dividends are more akin to bond substitutes and are therefore not particularly attractive.” He added, “That is why I have compiled a list of stocks that are building trust with shareholders by consistently maintaining or increasing their dividends.”