Nasdaq
华尔街日报Shin Steel Co.,Ltd. (KOSDAQ:162300) Will Pay A ₩20.00 Dividend In Three Days
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Shin Steel Co.,Ltd. (KOSDAQ:162300) is about to trade ex-dividend in the next three 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 of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Therefore, if you purchase Shin SteelLtd's shares on or after the 29th of December, you won't be eligible to receive the dividend, when it is paid on the 17th of April.
The company's upcoming dividend is ₩20.00 a share, following on from the last 12 months, when the company distributed a total of ₩20.00 per share to shareholders. Looking at the last 12 months of distributions, Shin SteelLtd has a trailing yield of approximately 1.1% on its current stock price of ₩1792.00. If you buy this business for its dividend, you should have an idea of whether Shin SteelLtd's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
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. Shin SteelLtd paid out just 24% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. The good news is it paid out just 5.4% of its free cash flow in the 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.
Check out our latest analysis for Shin SteelLtd
Click here to see how much of its profit Shin SteelLtd paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Shin SteelLtd's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 38% a year over the past five years.
Unfortunately Shin SteelLtd has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
The Bottom Line
Should investors buy Shin SteelLtd for the upcoming dividend? Shin SteelLtd 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 Shin SteelLtd from a dividend perspective.
On that note, you'll want to research what risks Shin SteelLtd is facing. For example, we've found 3 warning signs for Shin SteelLtd (2 are potentially serious!) that deserve your attention before investing in the 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.