Satrec Initiative Co., Ltd. (KOSDAQ:099320) Looks Interesting, And It's About To Pay A Dividend

Satrec Initiative Co., Ltd. (KOSDAQ:099320) stock is about to trade ex-dividend in 3 days. This means that investors who purchase shares on or after the 29th of December will not receive the dividend, which will be paid on the 17th of April.

Satrec Initiative's next dividend payment will be ₩210 per share, and in the last 12 months, the company paid a total of ₩210 per share. Calculating the last year's worth of payments shows that Satrec Initiative has a trailing yield of 0.7% on the current share price of ₩28900. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Satrec Initiative has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Satrec Initiative

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Satrec Initiative has a low and conservative payout ratio of just 16% of its income after tax. 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. What's good is that dividends were well covered by free cash flow, with the company paying out 19% of its cash flow last year.

It's positive to see that Satrec Initiative'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 Satrec Initiative paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Satrec Initiative has grown its earnings rapidly, up 41% a year for the past five years. Satrec Initiative earnings per share have been sprinting ahead like the Road Runner at a track and field day; scarcely stopping even for a cheeky "beep-beep". We also like that it is reinvesting most of its profits in its business.'

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Satrec Initiative has lifted its dividend by approximately 7.7% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

Has Satrec Initiative got what it takes to maintain its dividend payments? Satrec Initiative has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past 10 years, but the conservative payout ratio makes the current dividend look sustainable. There's a lot to like about Satrec Initiative, and we would prioritise taking a closer look at it.

Keen to explore more data on Satrec Initiative's financial performance? Check out our visualisation of its historical revenue and earnings growth.

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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