There's A Lot To Like About UJU Electronics' (KOSDAQ:065680) Upcoming ₩300.00 Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that UJU Electronics Co. Ltd (KOSDAQ:065680) is about to go ex-dividend in just 4 days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Therefore, if you purchase UJU Electronics' shares on or after the 29th of December, you won't be eligible to receive the dividend, when it is paid on the 27th of April.

The company's next dividend payment will be ₩300.00 per share, on the back of last year when the company paid a total of ₩300 to shareholders. Based on the last year's worth of payments, UJU Electronics has a trailing yield of 0.9% on the current stock price of ₩34850.00. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to check whether the dividend payments are covered, and if earnings are growing.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. UJU Electronics has a low and conservative payout ratio of just 10% of its income after tax. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Dividends consumed 64% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

It's positive to see that UJU Electronics's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

View our latest analysis for UJU Electronics

Click here to see how much of its profit UJU Electronics paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see UJU Electronics's earnings per share have risen 16% per annum over the last five years. UJU Electronics has an average payout ratio which suggests a balance between growing earnings and rewarding shareholders. Given the quick rate of earnings per share growth and current level of payout, there may be a chance of further dividend increases in the future.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. UJU Electronics has delivered an average of 12% per year annual increase in its dividend, based on the past six years of dividend payments. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

Is UJU Electronics worth buying for its dividend? Earnings per share have grown at a nice rate in recent times and over the last year, UJU Electronics paid out less than half its earnings and a bit over half its free cash flow. There's a lot to like about UJU Electronics, and we would prioritise taking a closer look at it.

Want to learn more about UJU Electronics? Here's a visualisation of its historical rate of revenue and earnings growth.

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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.