Seoyon (KRX:007860) Is Due To Pay A Dividend Of ₩200.00

Seoyon Co., Ltd.'s (KRX:007860) investors are due to receive a payment of ₩200.00 per share on 22nd of April. This payment means that the dividend yield will be 2.2%, which is around the industry average.

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Seoyon's Future Dividend Projections Appear Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Prior to this announcement, Seoyon's earnings easily covered the dividend, but free cash flows were negative. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.

If the trend of the last few years continues, EPS will grow by 45.8% over the next 12 months. If the dividend continues on this path, the payout ratio could be 4.5% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Seoyon

Seoyon Is Still Building Its Track Record

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. Since 2019, the dividend has gone from ₩50.00 total annually to ₩200.00. This means that it has been growing its distributions at 26% per annum over that time. Seoyon has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Seoyon has seen EPS rising for the last five years, at 46% per annum. 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.

Our Thoughts On Seoyon's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While Seoyon is earning enough to cover the payments, the cash flows are lacking. We don't think Seoyon is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 2 warning signs for Seoyon 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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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.