[Edaily Reporter Shin Ha-yeon ] As the year-end dividend season approaches, investor interest in high-dividend stocks is growing. This year, Korea District Heating is expected to have the highest projected dividend yield—in the high 8% range—while securities stocks, which are expected to see a significant increase in dividends per share (DPS) driven by improved earnings, have also made up a large portion of the top-ranked stocks. However, experts advise that investors should look beyond simply comparing dividend yields and instead assess whether dividend growth is accompanied by improved earnings.

According to financial information provider FnGuide Inc. on the 20th, among stocks for which at least three securities firms have estimated dividends, the stock with the highest projected dividend yield this year is Korea District Heating(071320). The dividend yield was calculated by dividing the DPS for common stock cash dividends estimated by securities firms by the closing price on the 17th.

The Korea District Heating Corporation’s closing price on the 17th was 75,000 won, and its projected DPS for this year is 6,520 won, resulting in an expected dividend yield of 8.69%. The projected DPS represents an increase of 363 won from last year’s 6,157 won. AJ Networks Co.,Ltd.(095570)followed with a yield of 8.33%. AJ Networks Co.,Ltd.’s projected DPS for this year is 343 won, a 13-won increase from last year’s 330 won.

In particular, securities stocks dominated the top ranks for expected dividend yields. NH INVESTMENT & SECURITIES(005940)ranked third with an expected dividend yield of 7.99%, while SamsungSecurities(016360)ranked fourth with 7.98%. NH INVESTMENT & SECURITIES’ projected DPS for this year is estimated at 2,031 won, an increase of 731 won from last year. SamsungSecurities’ projected DPS is also expected to rise by 2,867 won year-over-year to 6,867 won.

This is due to a significant improvement in securities firms’ earnings, driven by factors such as rising trading volumes as the domestic stock market continued to hit record highs in the first half of the year. NH INVESTMENT & SECURITIES’ projected operating profit for this year is 2.3238 trillion won, a 64% increase from the previous year. SamsungSecurities’ operating profit is also expected to rise 68% over the same period to 2.3117 trillion won.

Following these, Webzen Inc.(069080)recorded an expected dividend yield of 7.96%, SOOP(067160)7.27%, and CheilWorldwide(030000)7.23%. KIWOOM Securities(039490)is projected at 7.15%, and KOREA INVESTMENT HOLDINGS(071050)at 6.84%. Including these, a total of 29 companies are projected to have dividend yields of 5% or higher this year.

However, a high dividend yield does not necessarily indicate strong investment appeal. Since the dividend yield is calculated by dividing the DPS by the current stock price, it can actually increase even if dividends remain unchanged, provided the stock price falls due to factors such as deteriorating earnings. For example, if the stock price drops from 10,000 won to 5,000 won, the dividend yield would rise from 5% to 10% even if the same 500 won dividend is paid.

Yoo Seong-man, an analyst at Leading Investment Securities, noted, “High dividends resulting from an increase in DPS are a consequence of strengthened shareholder returns and a key factor in ensuring the long-term sustainability of high dividends.” He added, “However, we must distinguish whether a high dividend yield stems from a deterioration in fundamentals caused by a sharp drop in the stock price or is merely a short-term issue resulting from a decline in the index.”

In fact, some of the top 10 companies by projected dividend yield are expected to see a decline in earnings this year. Korea District Heating Corporation’s operating profit is forecast to decrease by 3.6% year-over-year, while Webzen Inc.’s is projected to fall by 24%. SOOP and CheilWorldwide’s operating profits are also estimated to decline by 25% and 5%, respectively. This is why it is important to examine not only the dividend yield but also the potential for future earnings recovery and the sustainability of dividends.

The market anticipates that, in addition to improvements in corporate profits and cash flow, the implementation of separate taxation on dividend income will spur companies to begin expanding their dividends in earnest.

Starting this year, separate taxation applies to companies whose dividends do not decrease from the previous year and have a dividend payout ratio of 40% or higher, or to those with a dividend payout ratio of 25% or higher and a year-over-year dividend increase of 10% or more. Analysts suggest that companies are likely to raise their dividend payout ratios and total dividend amounts to meet these eligibility requirements.

Researcher Yoo predicted, “Improvements in corporate profits and cash flow from 2026 to 2027 have significantly increased the funds available for expanding dividends,” adding, “Furthermore, the separate taxation of dividend income for high-dividend companies will provide sufficient incentive for companies to raise their dividend payout ratios and increase total dividend payouts.”

The continued high-interest-rate environment, driven by successive benchmark rate hikes by the U.S. and Japanese central banks, is another factor boosting interest in dividend stocks. When interest rates rise, the discount rate applied to future profits increases, reducing the relative appeal of growth stocks; conversely, the value of dividend stocks—which return stable cash flows to shareholders—can come to the fore.

Lee Kyung-ja, an analyst at SamsungSecurities, explained, “When upward pressure on interest rates is strong, cash flow becomes more important than capital gains in the distant future, for which the discount rate expands,” adding, “Dividend stocks with proven growth potential can mitigate the impact of interest rates by generating tangible cash flow.”