Woori Financial Group (KRX:316140) Has Announced A Dividend Of ₩180.00

The board of Woori Financial Group Inc. (KRX:316140) has announced that it will pay a dividend on the 11th of November, with investors receiving ₩180.00 per share. This means the annual payment will be 4.4% of the current stock price, which is lower than the industry average.

See our latest analysis for Woori Financial Group

Woori Financial Group's Dividend Forecasted To Be Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end.

Having paid out dividends for 9 years, Woori Financial Group has a good history of paying out a part of its earnings to shareholders. Based on Woori Financial Group's last earnings report, the payout ratio is at a decent 34%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next 3 years, EPS is forecast to expand by 29.4%. Analysts estimate the future payout ratio will be 30% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

Woori Financial Group's Dividend Has Lacked Consistency

Even in its relatively short history, the company has reduced the dividend at least once. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. Since 2015, the annual payment back then was ₩500.00, compared to the most recent full-year payment of ₩720.00. This works out to be a compound annual growth rate (CAGR) of approximately 4.1% a year over that time. It's encouraging to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth anyway, which makes this less attractive as an income investment.

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. Woori Financial Group has impressed us by growing EPS at 5.0% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Woori Financial Group's prospects of growing its dividend payments in the future.

In Summary

Overall, we think Woori Financial Group is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Woori Financial Group that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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