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Freedom251 › Blog › 005930

Samsung Electronics vs. Samsung Preferred Shares: Which Is Right for You?

By Freedom251 Team · · 9 min read

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Short answer: Samsung Electronics’ ordinary KRX share (005930) is the more straightforward choice if you want ordinary voting rights. The preferred KRX share (005935) is non-voting and has distinct dividend terms, but Samsung’s latest reported quarterly resolution paid the same KRW amount per share to both classes. Preferred shares are not automatically the higher-income option. Your decision should rest on the current prices and yields, the rights you value, whether your broker can access the relevant market, and your tolerance for liquidity and currency risks.

What you are actually comparing

Samsung Electronics has two listed Korean share classes that are easy to confuse because both represent the same company. The ordinary common share trades on the Korea Exchange (KRX) under 005930 and has ISIN KR7005930003. The preferred share trades on the KRX under 005935 and has ISIN KR7005931001.

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Samsung also lists global depositary receipts (GDRs) on the London Stock Exchange: SMSN represents the common class and SMSEL represents the preferred class. A GDR is a different trading route from buying the Korean listing directly. Your broker, country of residence, currency arrangements, dealing costs and market permissions determine which route is available.

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The central distinction is governance. Common shareholders receive the ordinary voting rights attached to that class. Samsung’s Articles of Incorporation describe the preferred class as cumulative and non-voting. The preferred share therefore cannot be treated as simply a cheaper version of the common share; it is a separate security with its own rights and market price.

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Feature Common share Preferred share
KRX ticker 005930 005935
KRX ISIN KR7005930003 KR7005931001
London GDR ticker SMSN SMSEL
Ordinary voting Yes, as the ordinary class No, under Article 8 of Samsung’s Articles
Dividend terms Set through company decisions and applicable class rights Distinct terms; Article 8 describes cumulative, non-voting preferred shares
2026 Q1 cash dividend reported by Samsung KRW 372 per share KRW 372 per share
FY2025 dividend yield reported by Samsung 1.5% 1.9%

The figures in the last two rows are dated company disclosures, not a promise about the next payment or a live yield.

Voting rights: the clearest reason to choose common

What common shareholders get

The common share is Samsung Electronics’ ordinary voting class. If your objective includes participating in shareholder votes, the common listing is the direct choice between these two securities. Voting does not guarantee influence over every decision: the practical effect depends on your holding, the meeting agenda and the company’s ownership structure. It does, however, give you the ordinary class right that the preferred share lacks.

What preferred shareholders do not get

Article 8 of Samsung’s Articles of Incorporation states: "Preferred shares to be issued by the Company shall be cumulative and non-voting". “Non-voting” means you should not buy 005935 expecting ordinary votes at general meetings. “Cumulative” is a feature of the dividend entitlement, but the exact operation is governed by the Articles and the terms applicable to the particular issue.

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The same article includes an additional-dividend provision: "In case the dividend ratio of the common shares exceeds that of the preferred shares, the additional dividends on preferred shares shall be declared in the amount equivalent to such exceeding ratio." That wording must be read with the class history and the actual resolutions. It does not establish that 005935 always pays a larger cash amount per share.

Do not apply one rule to every historical preferred share

Samsung’s Articles contain separate transitional language for legacy preferred shares issued before February 28, 1997. A statement about the current preferred class should not be extended automatically to those older terms. If you are analyzing an old certificate, a corporate-action record or a security whose identity is unclear, confirm the applicable issue terms rather than relying on the ticker alone.

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Dividend payments: why “preferred” does not automatically mean “higher”

The latest reported quarterly resolution

Samsung’s 2026 first-quarter cash-dividend resolution lists KRW 372 per share for common and KRW 372 per share for preferred. In that reported quarter, the cash amount was equal. It is therefore inaccurate to describe 005935 as guaranteed to pay a premium simply because it is labelled preferred.

The FY2025 record

Samsung’s FY2025 dividend table lists KRW 1,668 per common share and KRW 1,669 per preferred share. The one-won difference is a historical reported result, not a standing rule for future years.

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Samsung disclosure Common Preferred How to interpret it
2026 Q1 cash dividend KRW 372 per share KRW 372 per share Equal amount in that resolution
FY2025 total dividend shown in Samsung’s table KRW 1,668 per share KRW 1,669 per share Small historical difference; not a guarantee
FY2025 dividend yield shown in Samsung’s table 1.5% 1.9% Issuer-reported historical yield, not today’s yield

Why yield can differ when the dividend is the same

Yield is a relationship between the cash dividend and the price you pay. The basic calculation is:

Dividend yield = annual dividend per share ÷ share price × 100

If two classes each pay KRW 372 for a quarter but trade at different prices, their percentage yields will differ. For illustration only, a KRW 1,488 annualized payment on a KRW 70,000 share would equal about 2.13%, while the same payment on a KRW 60,000 share would equal about 2.48%. Those prices and the annualization are hypothetical; use the latest declared annual amount and an actual executable price for a real comparison.

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Samsung’s 1.5% common and 1.9% preferred figures are based on its annual Business Report for FY2025. They are useful historical reference points, but they do not tell you the yield at the price quoted by your broker today. A current calculation needs the latest declared dividend, the payment schedule and the current price for the exact listing you can buy.

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Samsung’s shareholder-return policy and what it does not tell you

The 2024–2026 policy

Samsung’s 2024–2026 shareholder-return policy says the company will pay KRW 9.8 trillion in annual regular dividends as part of a plan to return 50% of free cash flow over the period. These are policy-level figures for the company, not a fixed per-share payment for either ticker. Per-share cash depends on the declared amount, the class terms and the number of shares entitled to the distribution.

The August 21, 2026 estimate

In an August 21, 2026 announcement, Samsung estimated total 2026 shareholder return at KRW 90–110 trillion. The announcement also said that details of approximately KRW 30 trillion planned for third-quarter dividends would be finalized at the October board meeting. An estimate is not a completed distribution, and a company-wide total cannot be converted into a personal return without the eventual resolution and your number of shares.

Use the policy as context for how Samsung describes capital returns, not as a substitute for checking the latest class-specific dividend notice. Neither the 50% target nor the KRW 90–110 trillion estimate removes the possibility that future dividends, prices or yields will change.

Share counts show scale, not liquidity

Samsung reported 6,648,649,811 total shares outstanding at the end of Q2 2026. That consisted of 5,846,278,608 common shares (87.9%) and 802,371,203 preferred shares (12.1%).

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These counts tell you how many shares were outstanding at that reporting date. They do not establish daily trading volume, the bid–ask spread, the size of a preferred-share discount, or how easily a particular order will execute. Do not infer that the class with more shares is automatically more liquid, or that the smaller class is automatically mispriced.

How to decide which class fits your priorities

If your priority is… Starting point What you still need to verify
Ordinary voting participation Common 005930 (or SMSN where an eligible GDR route is available) Your broker’s voting process and the exact instrument you will hold
Potentially higher yield at the purchase price Compare both classes; do not assume preferred wins Current price, latest annualized dividend, spread and execution cost
Specific preferred dividend rights Preferred 005935 (or SMSEL through an eligible GDR route) Article 8, issue date, cumulative provisions and the latest resolution
Simpler market identification Use the KRX ticker and ISIN that your broker displays Whether you are buying the Korean listing or a London GDR, plus currency and fees
Short-term trading Neither class can be selected safely from the name alone Live volume, spread, order-book depth and your own execution limits

Choose common when governance is part of the investment case

Common is the cleaner fit when voting rights matter, when you want the ordinary class without having to interpret preferred provisions, or when the current valuation difference does not compensate you for giving up a vote. That is a conditional preference, not a claim that common will outperform.

Consider preferred only after checking the complete economics

Preferred can be worth examining if its current price produces an attractive yield relative to common and you are comfortable with non-voting status. The comparison must include the actual cash amount, price, spread, trading access and the terms of the specific class. A lower price can raise the percentage yield, but it can also reflect weaker demand, thinner trading or a market view about the value of voting rights.

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A seven-step comparison before placing an order

  1. Identify the exact security. Confirm 005930 or 005935 for the KRX, or SMSN or SMSEL for a London GDR. Match the ISIN shown by your broker to avoid buying the wrong class.
  2. Confirm your market access. Check that your account is permitted to trade the Korean exchange or the relevant London GDR, and note the dealing currency, foreign-exchange conversion, custody charges and any minimum order rules.
  3. Record an executable price. Use the bid, ask and recent trade information available when you would actually place the order. A delayed quote or a headline price is not enough for a yield calculation.
  4. Find the latest class-specific dividend. Use Samsung’s latest dividend resolution and distinguish ordinary, preferred, interim, quarterly and special amounts. Do not substitute the company-wide shareholder-return target for a declared per-share payment.
  5. Calculate both yields on the same basis. Divide the latest comparable annual cash amount by each class’s current price. Keep the currency and the annualization method consistent.
  6. Read the rights that affect your decision. Check voting status, cumulative language, additional-dividend wording and the issue-date provisions for any legacy security. The ticker name alone does not contain those details.
  7. Stress-test the choice. Ask whether you would still hold the security if the prices converged, the next dividend were lower, the spread widened or you could not vote. If the answer depends on a dividend premium, define the minimum premium that would justify the loss of voting rights before trading.

KRX shares versus London GDRs

The KRX listings are the underlying Korean share classes identified by 005930 and 005935. The London listings, SMSN and SMSEL, are GDR routes. Availability is not universal: a broker may offer one market but not the other, and local rules can limit who may trade or hold a particular instrument.

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Before choosing a GDR for convenience, compare the total cost and the practical rights. Check the dealing commission, custody charge, foreign-exchange conversion, market hours, quote currency, dividend handling and any depositary fee disclosed by your broker. Also verify how voting instructions, corporate actions and withholding taxes are handled for your residence. Those terms vary by broker and jurisdiction and are not established by the share-class comparison itself.

Common mistakes and how to avoid them

Assuming “preferred” means a permanent dividend premium

The 2026 Q1 resolution paid KRW 372 to each class. The FY2025 table showed only a KRW 1 difference. Treat the actual resolution and your purchase price as decisive evidence; treat the label as a prompt to read the rights, not as a yield guarantee.

Calling a historical yield “today’s yield”

The 1.5% and 1.9% figures are Samsung’s FY2025 reported yields. Prices move every trading day, and a new dividend can change the numerator. Date every yield you quote and recalculate it at the price you can actually obtain.

Using a company-wide return estimate as personal income

KRW 90–110 trillion is Samsung’s estimated total 2026 shareholder return, not a per-share payment. The approximately KRW 30 trillion Q3 component was still awaiting board finalization in the cited August announcement. Wait for the formal resolution before treating any amount as declared cash.

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Inferring liquidity from outstanding shares

The Q2 2026 share counts describe issued scale, not order-book depth. Check live volume and spreads for the listing and time of day in which you plan to trade.

Ignoring the loss of voting rights

A preferred share can look attractive on a spreadsheet while being unsuitable for an investor who values governance participation. Put the non-voting status next to the yield calculation, not in a footnote.

Comparing unlike instruments

Do not compare a KRX share price in Korean won with a GDR quote in another currency without adjusting for the GDR ratio, currency and depositary costs shown by your broker. Use the instrument you can actually buy and sell.

What is still unknown when you make the decision

A responsible comparison cannot supply a live preferred-share discount, current yield, current volume, bid–ask spread, investor-specific tax outcome or country-by-country broker eligibility without data for your account and date. Those variables can change independently of Samsung’s Articles and published dividend history.

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For that reason, the most defensible conclusion is conditional: common is the natural starting point when ordinary voting matters; preferred deserves consideration only when its current, verifiable price-and-dividend combination compensates you for non-voting status and any access or liquidity disadvantages. Neither class is automatically superior for every investor.

Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

005930005935dividendsinvesting basicsKRXpreferred sharesSamsung Electronics

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