Nasdaq
華爾街日報NEXTIN (KOSDAQ:348210) Is Increasing Its Dividend To ₩510.00
NEXTIN, Inc. (KOSDAQ:348210) has announced that it will be increasing its dividend from last year's comparable payment on the 1st of January to ₩510.00. Despite this raise, the dividend yield of 0.7% is only a modest boost to shareholder returns.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that NEXTIN's stock price has increased by 50% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.
NEXTIN's Projected Earnings Seem Likely To Cover Future Distributions
Even a low dividend yield can be attractive if it is sustained for years on end. Based on the last payment, NEXTIN's earnings were much higher than the dividend, but it wasn't converting those earnings into cash flow. Since a dividend means the company is paying out cash to investors, this could prove to be a problem in the future.
Analysts expect a massive rise in earnings per share in the next year. If the dividend extends its recent trend, estimates say the dividend could reach 6.4%, which we would be comfortable to see continuing.
View our latest analysis for NEXTIN
NEXTIN Doesn't Have A Long Payment History
The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2021, the annual payment back then was ₩500.00, compared to the most recent full-year payment of ₩510.00. Its dividends have grown at less than 1% per annum over this time frame. NEXTIN hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.
NEXTIN May Find It Hard To Grow The Dividend
Investors could be attracted to the stock based on the quality of its payment history. Although it's important to note that NEXTIN's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. Growth of 0.5% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. This could mean the dividend doesn't have the growth potential we look for going into the future.
Our Thoughts On NEXTIN's Dividend
Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. This company is not in the top tier of income providing stocks.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 2 warning signs for NEXTIN you should be aware of, and 1 of them is a bit concerning. Is NEXTIN not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.