Industrial Bank of Korea's (KRX:024110) Shareholders Will Receive A Bigger Dividend Than Last Year

Industrial Bank of Korea's (KRX:024110) dividend will be increasing from last year's payment of the same period to ₩1065.00 on 1st of January. Based on this payment, the dividend yield for the company will be 6.3%, which is fairly typical for the industry.

Check out our latest analysis for Industrial Bank of Korea

Industrial Bank of Korea's Earnings Will Easily Cover The Distributions

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Having distributed dividends for at least 10 years, Industrial Bank of Korea has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 32%, which means that Industrial Bank of Korea would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, EPS is forecast to rise by 11.5% over the next 3 years. Analysts forecast the future payout ratio could be 34% over the same time horizon, which is a number we think the company can maintain.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2015, the annual payment back then was ₩330.00, compared to the most recent full-year payment of ₩984.00. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. Industrial Bank of Korea has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

We Could See Industrial Bank of Korea's Dividend Growing

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Industrial Bank of Korea has impressed us by growing EPS at 8.3% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

We Really Like Industrial Bank of Korea's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Industrial Bank of Korea that investors should take into consideration. Is Industrial Bank of Korea 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.