Why You Might Be Interested In Heungkuk Metaltech Co.,Ltd. (KOSDAQ:010240) For Its Upcoming Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Heungkuk Metaltech Co.,Ltd. (KOSDAQ:010240) is about to go ex-dividend in just 4 days. You can purchase shares before the 29th of December in order to receive the dividend, which the company will pay on the 26th of March.

Heungkuk MetaltechLtd's next dividend payment will be ₩150 per share, on the back of last year when the company paid a total of ₩150 to shareholders. Looking at the last 12 months of distributions, Heungkuk MetaltechLtd has a trailing yield of approximately 2.4% on its current stock price of ₩6130. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Heungkuk MetaltechLtd has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Heungkuk MetaltechLtd

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Heungkuk MetaltechLtd paid out just 17% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether Heungkuk MetaltechLtd generated enough free cash flow to afford its dividend. It distributed 34% of its free cash flow as dividends, a comfortable payout level for most companies.

It's positive to see that Heungkuk MetaltechLtd's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Heungkuk MetaltechLtd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Heungkuk MetaltechLtd has grown its earnings rapidly, up 45% a year for the past five years. Heungkuk MetaltechLtd is paying out less than half its earnings and cash flow, while simultaneously growing earnings per share at a rapid clip. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Heungkuk MetaltechLtd has increased its dividend at approximately 12% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

Final Takeaway

Is Heungkuk MetaltechLtd an attractive dividend stock, or better left on the shelf? We love that Heungkuk MetaltechLtd is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. These characteristics suggest the company is reinvesting in growing its business, while the conservative payout ratio also implies a reduced risk of the dividend being cut in the future. It's a promising combination that should mark this company worthy of closer attention.

So while Heungkuk MetaltechLtd looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To help with this, we've discovered 1 warning sign for Heungkuk MetaltechLtd that you should be aware of before investing in their shares.

If you're in the market for dividend stocks, we recommend checking our list of top 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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