Samsung Electronics Co. is expected to share its skyrocketing profits with shareholders in the form of record-high dividends and buybacks.

Industry insiders said on Monday the company will release a detailed three-year plan to boost shareholder value along with its final third-quarter results on Oct. 31.

On expectation that the semiconductor boom would continue throughout next year, the world’s largest memory chipmaker is said to allocate its free cash flow to buying back its shares and paying out what could be its biggest dividend yet.

Samsung Electronics projected earlier this month that it would have achieved a record quarterly performance in the July-September period, with operating profit surging by nearly threefold to 14.5 trillion won ($12.8 billion).

Last year, the Korean tech giant allocated 3.99 trillion won on dividends and 7.14 trillion won on share buybacks to spend a total of 11.1 trillion won to boost shareholder value, or 49.7 percent of its 22.4 trillion won net profit.

The company’s net profit is predicted to exceed 40 trillion won this year and top 50 trillion won in the next two years. Considering that the company’s dividend payout ratio - the ratio of total dividends paid out to shareholders relative to the company’s net income - reached 17.8 percent last year, Samsung Electronics is expected to spend more than 7 trillion won on dividends this year and over 8 trillion won in 2018-2019, market analysts forecast.

Some industry insiders said the firm may be considering a modest dividend payout in exchange for a more aggressive buyback plan, citing the recent number of repurchased and canceled shares. A share buyback refers to a move in which the company purchases its shares to reduce the number of outstanding shares in the market. It has the effect of lifting share prices, ultimately benefiting shareholders.

In the first half of this year, the company has bought 1,659,600 common shares and 414,900 preferred shares and has canceled 10,010,843 common shares and 1,869,847 preferred shares. It is expected to continue driving share prices up through buybacks throughout next year.

Shares of Samsung Electronics closed Monday up 0.85 percent at 2,715,000 won.

By Lee Dong-in and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]