Three Days Left Until Dong-A Hwa Sung Co.,Ltd. (KOSDAQ:041930) Trades Ex-Dividend

It looks like Dong-A Hwa Sung Co.,Ltd. (KOSDAQ:041930) is about to go ex-dividend in the next three days. You can purchase shares before the 29th of December in order to receive the dividend, which the company will pay on the 10th of April.

Dong-A Hwa SungLtd's next dividend payment will be ₩50.00 per share, on the back of last year when the company paid a total of ₩50.00 to shareholders. Looking at the last 12 months of distributions, Dong-A Hwa SungLtd has a trailing yield of approximately 0.5% on its current stock price of ₩10000. 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.

See our latest analysis for Dong-A Hwa SungLtd

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. Dong-A Hwa SungLtd paid out just 18% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether Dong-A Hwa SungLtd generated enough free cash flow to afford its dividend. It paid out 5.1% of its free cash flow as dividends last year, which is conservatively low.

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.

Click here to see how much of its profit Dong-A Hwa SungLtd 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. If earnings fall far enough, the company could be forced to cut its dividend. Dong-A Hwa SungLtd's earnings per share have fallen at approximately 16% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Dong-A Hwa SungLtd has delivered 2.3% dividend growth per year on average over the past 10 years.

To Sum It Up

Is Dong-A Hwa SungLtd worth buying for its dividend? Dong-A Hwa SungLtd 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. To summarise, Dong-A Hwa SungLtd looks okay on this analysis, although it doesn't appear a stand-out opportunity.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example, Dong-A Hwa SungLtd has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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