There's A Lot To Like About DYPNFLtd's (KOSDAQ:104460) Upcoming ₩350 Dividend

DYPNF Co.,Ltd (KOSDAQ:104460) is about to trade ex-dividend in the next 3 days. If you purchase the stock on or after the 29th of December, you won't be eligible to receive this dividend, when it is paid on the 31st of March.

DYPNFLtd's upcoming dividend is ₩350 a share, following on from the last 12 months, when the company distributed a total of ₩350 per share to shareholders. Calculating the last year's worth of payments shows that DYPNFLtd has a trailing yield of 1.9% on the current share price of ₩18100. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for DYPNFLtd

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. DYPNFLtd is paying out just 15% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. A useful secondary check can be to evaluate whether DYPNFLtd generated enough free cash flow to afford its dividend. Luckily it paid out just 19% of its free cash flow last year.

It's positive to see that DYPNFLtd'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 DYPNFLtd 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 DYPNFLtd has grown its earnings rapidly, up 44% a year for the past five years. DYPNFLtd 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.'

Given that DYPNFLtd has only been paying a dividend for a year, there's not much of a past history to draw insight from.

Final Takeaway

Has DYPNFLtd got what it takes to maintain its dividend payments? We love that DYPNFLtd 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. DYPNFLtd looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

While it's tempting to invest in DYPNFLtd for the dividends alone, you should always be mindful of the risks involved. Every company has risks, and we've spotted 1 warning sign for DYPNFLtd you should know about.

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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