Samsung launched its Shareholder Value Enhancement Program back in 2015 to increase shareholder value. The program saw the company doling out billions in dividends. The company has also spent billions on buying back shares and canceling them. Samsung today outlined its Shareholder Return Program for 2018-2010.
Shareholders will be pleased to find out that Samsung dividends will double next year. The company is going to increase annual dividends by 20 percent in 2017. It promises a 100 percent rise in dividends for 2018. It will allocate 9.6 trillion won or $8.5 billion for this purpose in 2018. Samsung will then maintain that level for 2019 and 2020 dividends.
Samsung Dividends
This is going to translate into approximately 29 trillion won or $25.9 billion of total dividend returns in the 2018-2020 period. Samsung has also confirmed that it's not going to fund future merger and acquisition investments from its free cash flow. This is going to increase the amount of capital available to return to shareholders.
The portion of free cash flow for shareholder returns will be set at minimum 50 percent over the 2018-2020 period. Once the dividends have been paid out, Samsung may use any remaining portion of the 50 percent free cash flow for additional cash dividends or share buybacks as deemed appropriate.
Samsung's efforts to boost shareholder value have been well received. The company's stock price has more than doubled since 2016 and it's now committed to delivering sustainable shareholder value.
