Only Three Days Left To Cash In On DONG AH TIRE & RUBBER's (KRX:282690) Dividend

Readers hoping to buy DONG AH TIRE & RUBBER CO., LTD. (KRX:282690) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Investors can purchase shares before the 29th of December in order to be eligible for this dividend, which will be paid on the 3rd of April.

DONG AH TIRE & RUBBER's next dividend payment will be ₩500 per share, on the back of last year when the company paid a total of ₩500 to shareholders. Based on the last year's worth of payments, DONG AH TIRE & RUBBER stock has a trailing yield of around 4.9% on the current share price of ₩10200. If you buy this business for its dividend, you should have an idea of whether DONG AH TIRE & RUBBER's dividend is reliable and sustainable. So we need to investigate whether DONG AH TIRE & RUBBER can afford its dividend, and if the dividend could grow.

View our latest analysis for DONG AH TIRE & RUBBER

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see DONG AH TIRE & RUBBER paying out a modest 45% of its earnings. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Fortunately, it paid out only 43% of its free cash flow in the past year.

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 AH TIRE & RUBBER paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. To our modest chagrin, DONG AH TIRE & RUBBER earnings per share have been effectively flat over the past year. Growth is a prerequisite for an outstanding dividend company over the long term, but we wouldn't read too much into flat numbers over any one year time frame.

Given that DONG AH TIRE & RUBBER has only been paying a dividend for a year, there's not much of a past history to draw insight from.

To Sum It Up

From a dividend perspective, should investors buy or avoid DONG AH TIRE & RUBBER? Earnings per share have been flat, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend gets cut. In summary, it's hard to get excited about DONG AH TIRE & RUBBER from a dividend perspective.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example, DONG AH TIRE & RUBBER has 3 warning signs (and 1 which is significant) we think you should know about.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising 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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