Seoyon Topmetal (KOSDAQ:019770) Has Announced A Dividend Of ₩65.00

The board of Seoyon Topmetal Co., Ltd. (KOSDAQ:019770) has announced that it will pay a dividend of ₩65.00 per share on the 15th of April. Based on this payment, the dividend yield will be 1.8%, which is fairly typical for the industry.

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Seoyon Topmetal's Future Dividend Projections Appear Well Covered By Earnings

Solid dividend yields are great, but they only really help us if the payment is sustainable. Before making this announcement, Seoyon Topmetal was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 23.6% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 6.7%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for Seoyon Topmetal

Seoyon Topmetal's Dividend Has Lacked Consistency

It's comforting to see that Seoyon Topmetal has been paying a dividend for a number of years now, however it has been cut at least once in that time. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. The dividend has gone from an annual total of ₩40.00 in 2019 to the most recent total annual payment of ₩65.00. This works out to be a compound annual growth rate (CAGR) of approximately 8.4% a year over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Seoyon Topmetal might have put its house in order since then, but we remain cautious.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Seoyon Topmetal has been growing its earnings per share at 24% a year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

We Really Like Seoyon Topmetal's Dividend

Overall, we like to see the dividend staying consistent, and we think Seoyon Topmetal might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 3 warning signs for Seoyon Topmetal that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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