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华尔街日报Be Sure To Check Out DONGSUNG CHEMICAL Co., Ltd. (KRX:102260) Before It Goes Ex-Dividend
It looks like DONGSUNG CHEMICAL Co., Ltd. (KRX:102260) is about to go ex-dividend in the next 3 days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Accordingly, DONGSUNG CHEMICAL investors that purchase the stock on or after the 29th of December will not receive the dividend, which will be paid on the 27th of April.
The company's next dividend payment will be ₩49.50495 per share, and in the last 12 months, the company paid a total of ₩200 per share. Based on the last year's worth of payments, DONGSUNG CHEMICAL has a trailing yield of 4.5% on the current stock price of ₩4460.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. DONGSUNG CHEMICAL paid out just 6.4% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. 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 22% of its cash flow last year.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
View our latest analysis for DONGSUNG CHEMICAL
Click here to see how much of its profit DONGSUNG CHEMICAL paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see DONGSUNG CHEMICAL's earnings have been skyrocketing, up 44% per annum for the past five years. DONGSUNG CHEMICAL earnings per share have been sprinting ahead like the Road Runner at a track and field day; scarcely stopping even for a cheeky "beep-beep". We also like that it is reinvesting most of its profits in its business.'
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. DONGSUNG CHEMICAL's dividend payments are broadly unchanged compared to where they were six years ago.
The Bottom Line
Has DONGSUNG CHEMICAL got what it takes to maintain its dividend payments? It's great that DONGSUNG CHEMICAL is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. Overall we think this is an attractive combination and worthy of further research.
While it's tempting to invest in DONGSUNG CHEMICAL for the dividends alone, you should always be mindful of the risks involved. Case in point: We've spotted 1 warning sign for DONGSUNG CHEMICAL you should be aware of.
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.