Industrial Bank of Korea's (KRX:024110) Upcoming Dividend Will Be Larger Than Last Year's

The board of Industrial Bank of Korea (KRX:024110) has announced that it will be paying its dividend of ₩1065.00 on the 1st of January, an increased payment from last year's comparable dividend. This makes the dividend yield about the same as the industry average at 6.3%.

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Industrial Bank of Korea's Payment Expected To Have Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

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.

The next 3 years are set to see EPS grow by 11.5%. Analysts estimate the future payout ratio will be 34% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Industrial Bank of Korea

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2015, the annual payment back then was ₩330.00, compared to the most recent full-year payment of ₩984.00. This means that it has been growing its distributions at 12% per annum over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

The Dividend Has Growth Potential

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 Industrial Bank of Korea has grown earnings per share at 8.3% per year over the past five years. Industrial Bank of Korea definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

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 of these factors considered, we think this has solid potential as a dividend 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. 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.