April 25, 2024

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[THE INVESTOR] Local investment experts have named Samsung Electronics as their top stock pick for the year ahead, showing expectations about the Korean tech giant’s earnings outlook and new dividend policy for investors.

According to a survey of nine heads of local investment research centers conducted by business daily Korea Economic Daily, seven picked Samsung as the most promising stock for 2017. 

“Samsung is willing, more than ever before, to share more profits with shareholders,” said Shin Dong-seok, head of Samsung Securities’ research center.

“The new shareholder policy and the ongoing management restructuring will further elevate Samsung shares.”

At a board directors’ meeting in November, Samsung decided to use almost half its cash reserves to pay dividends to shareholders and start the review to set up a holding company.

Since the announcement, the stock price has continue to rally in recent weeks. The price soared to an all-time high of 1,830,000 won (US$1,525) on Dec. 21 compared to a low of 1,088,000 won on Jan. 18.

Analysts’ consensus suggests the price could exceed 2 million won in the coming months.

Together with Samsung, the top analysts picked POSCO and Hyundai Motor as top stocks to buy in 2017.

“POSCO will benefit from the new Trump administration’s possible new infrastructure investment,” said Yoon Ji-ho, head of EBEST Investment and Securities’ research division.

Lee Jong-woo of IBK Investment and Securities forecast the weaker Korean won will continue for a while and help price competitiveness of Hyundai cars in overseas markets.

By Kim Young-won (wone0102@heraldcorp.com)