Four Days Left To Buy CJ Corporation (KRX:001040) Before The Ex-Dividend Date

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 CJ Corporation (KRX:001040) 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 29th of April.

CJ's next dividend payment will be ₩1,850 per share, on the back of last year when the company paid a total of ₩1,850 to shareholders. Looking at the last 12 months of distributions, CJ has a trailing yield of approximately 2.1% on its current stock price of ₩88400. 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.

See our latest analysis for CJ

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. CJ paid out a comfortable 30% of its profit last year. A useful secondary check can be to evaluate whether CJ generated enough free cash flow to afford its dividend. The good news is it paid out just 12% of its free cash flow in the last year.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's not ideal to see CJ's earnings per share have been shrinking at 3.4% a year over the previous five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, CJ has lifted its dividend by approximately 8.7% a year on average.

The Bottom Line

Has CJ got what it takes to maintain its dividend payments? CJ has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. In summary, it's hard to get excited about CJ from a dividend perspective.

So while CJ looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Be aware that CJ is showing 3 warning signs in our investment analysis, and 1 of those can't be ignored...

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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