HWASEUNG Industries Co.,Ltd. (KRX:006060) Is About To Go Ex-Dividend, And It Pays A 5.2% Yield

Readers hoping to buy HWASEUNG Industries Co.,Ltd. (KRX:006060) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase HWASEUNG IndustriesLtd's shares on or after the 29th of December will not receive the dividend, which will be paid on the 6th of April.

The company's next dividend payment will be ₩200.00 per share, on the back of last year when the company paid a total of ₩200 to shareholders. Looking at the last 12 months of distributions, HWASEUNG IndustriesLtd has a trailing yield of approximately 5.2% on its current stock price of ₩3855.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. HWASEUNG IndustriesLtd paid out a comfortable 44% of its profit last year. 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. What's good is that dividends were well covered by free cash flow, with the company paying out 19% of its cash flow last year.

It's positive to see that HWASEUNG IndustriesLtd'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.

See our latest analysis for HWASEUNG IndustriesLtd

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

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're discomforted by HWASEUNG IndustriesLtd's 16% per annum decline in earnings in the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. HWASEUNG IndustriesLtd has delivered an average of 31% per year annual increase in its dividend, based on the past six years of dividend payments.

Final Takeaway

Is HWASEUNG IndustriesLtd an attractive dividend stock, or better left on the shelf? HWASEUNG IndustriesLtd has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. All things considered, we are not particularly enthused about HWASEUNG IndustriesLtd from a dividend perspective.

So while HWASEUNG IndustriesLtd looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Every company has risks, and we've spotted 2 warning signs for HWASEUNG IndustriesLtd you should know about.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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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.