Guyoung Technology's (KOSDAQ:053270) Dividend Will Be ₩60.00

The board of Guyoung Technology Co., Ltd (KOSDAQ:053270) has announced that it will pay a dividend of ₩60.00 per share on the 13th of April. This means the annual payment is 2.8% of the current stock price, which is above the average for the industry.

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Guyoung Technology's Payment Could Potentially Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Guyoung Technology is quite easily earning enough to cover the dividend, however it is being let down by weak cash flows. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.

If the trend of the last few years continues, EPS will grow by 49.0% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 7.2%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Guyoung Technology

Guyoung Technology Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 6 years of history we want to see a few more years of history before making any solid conclusions. Since 2019, the dividend has gone from ₩30.00 total annually to ₩60.00. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Guyoung Technology has been growing its earnings per share at 49% a year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Our Thoughts On Guyoung Technology's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Guyoung Technology's payments, as there could be some issues with sustaining them into the future. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. Overall, we don't think this company has the makings of a good income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 4 warning signs for Guyoung Technology you should be aware of, and 1 of them shouldn't be ignored. Is Guyoung Technology not quite the opportunity you were looking for? Why not check out 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.