Cheil Grinding Wheel Ind (KRX:001560) Is Paying Out A Dividend Of ₩320.00

The board of Cheil Grinding Wheel Ind. Co., Ltd. (KRX:001560) has announced that it will pay a dividend on the 8th of April, with investors receiving ₩320.00 per share. Based on this payment, the dividend yield on the company's stock will be 3.5%, which is an attractive boost to shareholder returns.

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Cheil Grinding Wheel Ind's Projected Earnings Seem Likely To Cover Future Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, prior to this announcement, Cheil Grinding Wheel Ind's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

If the trend of the last few years continues, EPS will grow by 26.5% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 14% by next year, which is in a pretty sustainable range.

See our latest analysis for Cheil Grinding Wheel Ind

Cheil Grinding Wheel Ind Doesn't Have A Long Payment History

It is great to see that Cheil Grinding Wheel Ind has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The dividend has gone from an annual total of ₩200.00 in 2019 to the most recent total annual payment of ₩320.00. This works out to be a compound annual growth rate (CAGR) of approximately 8.1% a year over that time. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Cheil Grinding Wheel Ind has seen EPS rising for the last five years, at 26% per annum. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

We Really Like Cheil Grinding Wheel Ind's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 2 warning signs for Cheil Grinding Wheel Ind that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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