[Click eStock] "CJ, the Only Holding Company Dividend Surprise... Target Price Up"

On the 4th, Samsung Securities raised the target price for CJ by 8% to 133,000 KRW, stating that "the shareholder return policy is at a good level among holding companies." The buy rating was also maintained.

On the same day, Yang Il-woo, team leader at Samsung Securities, said, "Among major holding companies, CJ is the only company whose dividend per share for the '2023 fiscal year' exceeded market expectations by more than 10%," adding, "CJ announced a dividend of 3,000 KRW, which is 17% above the expected 2,568 KRW and a 20% increase compared to the previous year."

He also noted, "CJ is the only company among the 8 covered firms whose dividend increased by more than 4% compared to the previous year," and "a dividend of 3,000 KRW per share means a total dividend amount of about 100 billion KRW, which corresponds to approximately 97% of last year's dividend income."

This year, more than half of CJ's dividend income is expected to be generated from CJ Olive Young, suggesting that the dividend growth trend may continue. Team leader Yang explained, "This could be a reason why the increase in CJ Olive Young's corporate value should be reflected in CJ's stock price," and added, "We applied a net asset value (NAV) reflection rate of 0.65 to the changed subsidiary value to raise the target price."

He said, "CJ has a shareholder return policy that distributes more than 70% of net income based on separate financial statements," and added, "Most holding companies present shareholder return policies based on separate financial statements. Although net income based on separate financial statements can be reduced through increased separate expenses, CJ's dividend payout ratio is relatively high among those using the same separate standard."

Furthermore, "It is estimated that CJ also considers the dividend yield to some extent when deciding the dividend per share. This lowers the possibility that CJ's dividend yield will significantly underperform the industry average," and "Considering that some holding companies do not have shareholder return policies, CJ's shareholder return policy is at a good level within the holding company sector," he stated.

Team leader Yang added, "Due to CJ's dividend surprise, the dividend yield of CJ preferred shares also rose to 6.5%. Among KOSPI preferred shares with a market capitalization of over 100 billion KRW as of the closing price on the 29th of last month, CJ preferred shares are one of four companies with a dividend yield exceeding 5%," and said, "CJ preferred shares are also attractive as they have a discount rate of about 43% compared to common shares."

This content was produced with the assistance of AI translation services.