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Samsung is a household name all over the world. The company’s smartphones dominate global Android phone sales and Samsung is a leading contender in many other markets. Global technology giants are often great investments, and Samsung’s leading position has many investors wondering how to buy Samsung stock.

Samsung is a South Korean company that does not trade on a major US exchange. That makes investment a little complicated, but it’s still possible. Let’s take a closer look at the company and at a few ways to invest in Samsung shares.

What is Samsung?

The Samsung Group is a South Korean company. It is what the Koreans call a chaebol, or diversified industrial conglomerate. The Samsung Group has multiple subsidiaries in many different lines of business.

Samsung Electronics is the largest and best-known subsidiary of the Samsung Group. Samsung Electronics manufactures mobile phones, memory chips, LED and LCD panels, laptops, appliances, and much more, and accounts for around 70% of Samsung Group revenue.

Other Samsung Group subsidiaries include the world’s second-largest shipbuilder, along with companies engaged in construction, insurance, health care, and many others.

Samsung is the largest company in South Korea by a wide margin. Its products comprise around 20% of the country’s exports, and its revenues account for 17% of the country’s GDP. 

Samsung subsidiaries trade as independent companies. When we talk about how to buy Samsung stock we’re discussing shares in Samsung Electronics Inc.

Why Investors Want to Buy Samsung Stock 

Samsung is one of the world’s largest and most dominant technology companies. That attracts investor attention. Let’s look at some of the reasons investors are considering Samsung shares.

These benchmarks reflect Samsung’s position as a global technology leader.

Strength in Diversification

Samsung’s global reach and broad product line are illustrated in these charts.

YearSemiconductorDisplayInformation Technology and Mobile CommunicationsConsumer ElectronicsHarman
201651.226.9100.344.7
201774.334.5106.744.67.1
201886.332.5100.742.18.8
201964.931.1107.345.310.1
202072.930.699.648.29.2

Samsung Electronics Revenue by Segment (2016-2020)

CityDomesticAmericaEuropeAsia/AfricaChina
20160.10.340.190.190.18
20170.130.340.190.180.16
20180.140.340.180.170.18
20190.150.320.190.180.17
20200.160.330.190.160.16

Samsung Electronics Regional Portion of Revenue (2016-2020)

That diversity insulates the company against events that could affect one market or product line.

Financial Strength

Samsung has been a dominant company for many years and does not show exceptional growth rates. However, the company is consistently profitable and has shown resilience even in the face of the COVID-19 pandemic

Samsung Income Statement Q1 2021. Source: Samsung Investor Relations

Samsung’s consistent profitability has been matched by a consistently high profit margin. Samsung’s Gross Profit Margin is typically within a band between 35% and 48%.

Samsung has a limited margin for growth due to its already dominant position: the company needs market growth to sustain revenue growth. Samsung compensates for this lack by offering a dividend of 1,416 Korean Won per share, a yield of 1.74%.

How to Buy Samsung Stock

Samsung trades on the Korea Exchange (KRX). Unlike many major global companies, Samsung does not issue American Depository Receipts (ADRs) that trade on a US exchange. That limits the ways that investors, especially US investors, can buy and sell Samsung shares.

There are still options for those who want to invest in Samsung.

  • Samsung Global Depository Receipts (GDRs) are available to non-US investors on the London Stock Exchange. US investors are prohibited from buying GDRs by SEC Rule 144.
  • Buy shares in the Korean stock market. You will need to obtain an Investors Registration Certificate from Korea’s Foreign Supervisory Service and you’ll have to open an account with a Korean broker. 
  • US brokerage account holders can buy Samsung shares on the unregulated over-the-counter “Pink Sheet” market. There’s limited liquidity and you may not be able to buy and sell shares when you want to.
  • Invest in an ETF. Samsung dominates the Korean market, and Korea-focused ETFs usually feature significant Samsung holdings. The iShares MSCI South Korea Capped ETF (EWY), for example, has over 20% of its holdings in Samsung. The Direxion Daily MSCI South Korea Bull 3X Shares fund is a leveraged ETF with 22.34 of its holdings in Samsung.

For most investors, the ETF route is probably the easiest and safest. Samsung’s success is often seen as a proxy for the success of the Korean market as a whole, and if you believe in Samsung’s prospects there’s an argument for investing in the broader Korean market.

📚 If you’re considering investing in mutual funds or ETFs, look at our primer on mutual fund investing for beginners first!

Should You Buy Samsung Stock?

All investments involve risk. An investment in Samsung is no different.

Samsung is relatively well insulated from many investment risks. The company serves an extremely wide range of markets with a very diverse range of products. Samsung is not immune to a global recession but the company is not likely to be seriously affected by upheaval in one market or in one product line.

That protection is not complete. The mobile phone market, in particular, is highly competitive and other manufacturers could introduce superior products that would reduce Samsung’s market share.

Samsung could be vulnerable to political upheaval or conflict on the Korean peninsula.

A greater concern for US investors may be that Samsung trades only on the Korean market, which limits buying from US investors. That has kept the valuation more modest than that of many tech leaders. For example, Apple’s 2020 P/E ratio was 38.67, while Samsung’s was a much more modest 18.9. 

While the relatively restricted trading in the stock keeps the valuation reasonable, it also obstructs US buying that could push the share price up.

You should consider all of these risks and more before investing. It’s always a good idea to consult a qualified financial advisor before making investments.

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FAQs

What is Samsung?

Samsung is a South Korean diversified industrial company. Samsung electronics, the largest subsidiary of the Samsung Group, manufactures mobile phones, semiconductors, LED and LCD panels, appliances, and many other products.

What are Samsung’s Highlights?

Samsung Electronics is the world’s second largest electronics company and 19th largest corporation by revenue. The Company is the leading manufacturer of Android smartphones and was the leading manufacturer of all smartphones in 2020. Samsung is aggressively developing 5G and 6G mobile technology.

How Can I Buy Samsung Stock?

Samsung trades on the Korean KRX exchange. Non-US investors can buy Global Depository Receipts (GDRs) on the London Stock Exchange. US investors may need to open an account with a Korean broker or buy shares on the OTC Pink Sheet market. It’s also possible to invest indirectly in Samsung by purchasing a Korea-focused ETF.

Are There Any Concerns About Samsung?

Samsung is a global, highly diversified company, which insulates it against risks in any one market or product lime. The company is consistently profitable but has not generated high growth rates, which could constrain growth. It is difficult for US investors to buy Samsung shares, which could constrain the stock price.