Samsung Climate Control (KRX:006660) Is Paying Out A Dividend Of ₩80.00

Samsung Climate Control Co., Ltd. (KRX:006660) has announced that it will pay a dividend of ₩80.00 per share on the 27th of April. This payment means the dividend yield will be 0.5%, which is below the average for the industry.

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Samsung Climate Control's Payment Could Potentially Have Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. However, prior to this announcement, Samsung Climate Control's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

If the trend of the last few years continues, EPS will grow by 39.7% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 3.9% by next year, which is in a pretty sustainable range.

View our latest analysis for Samsung Climate Control

Samsung Climate Control's Dividend Has Lacked Consistency

Samsung Climate Control has been paying dividends for a while, but the track record isn't stellar. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. Since 2018, the dividend has gone from ₩100.00 total annually to ₩80.00. The dividend has shrunk at around 3.1% a year during that period. A company that decreases its dividend over time generally isn't what we are looking for.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. We are encouraged to see that Samsung Climate Control has grown earnings per share at 40% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

Samsung Climate Control Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Samsung Climate Control that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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