Nasdaq
华尔街日报TOPTEC Co., Ltd (KOSDAQ:108230) Pays A ₩150.00 Dividend In Just Three Days
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see TOPTEC Co., Ltd (KOSDAQ:108230) is about to trade ex-dividend in the next three 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. 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 TOPTEC's shares on or after the 29th of December will not receive the dividend, which will be paid on the 24th of April.
The company's upcoming dividend is ₩150.00 a share, following on from the last 12 months, when the company distributed a total of ₩150 per share to shareholders. Based on the last year's worth of payments, TOPTEC stock has a trailing yield of around 3.1% on the current share price of ₩4805.00. If you buy this business for its dividend, you should have an idea of whether TOPTEC's dividend is reliable and sustainable. As a result, readers should always check whether TOPTEC has been able to grow its dividends, or if the dividend might be cut.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. TOPTEC reported a loss last year, so it's not great to see that it has continued paying a dividend. With the recent loss, it's important to check if the business generated enough cash to pay its dividend. If cash earnings don't cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable. It distributed 28% of its free cash flow as dividends, a comfortable payout level for most companies.
See our latest analysis for TOPTEC
Click here to see how much of its profit TOPTEC 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. TOPTEC reported a loss last year, but at least the general trend suggests its income has been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. TOPTEC's dividend payments are effectively flat on where they were six years ago.
Remember, you can always get a snapshot of TOPTEC's financial health, by checking our visualisation of its financial health, here.
To Sum It Up
Should investors buy TOPTEC for the upcoming dividend? It's hard to get used to TOPTEC paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of TOPTEC's dividend merits.
While it's tempting to invest in TOPTEC for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 1 warning sign for TOPTEC that you should be aware of before investing in their shares.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.