Here's What We Like About Hyundai Elevator's (KRX:017800) Upcoming Dividend

Readers hoping to buy Hyundai Elevator Co., Ltd (KRX:017800) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. You will need to purchase shares before the 29th of December to receive the dividend, which will be paid on the 2nd of April.

Hyundai Elevator's next dividend payment will be ₩600 per share. Last year, in total, the company distributed ₩600 to shareholders. Based on the last year's worth of payments, Hyundai Elevator has a trailing yield of 1.5% on the current stock price of ₩39700. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Hyundai Elevator

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Hyundai Elevator paid out a comfortable 27% of its profit last year. A useful secondary check can be to evaluate whether Hyundai Elevator generated enough free cash flow to afford its dividend. Fortunately, it paid out only 26% of its free cash flow in the past year.

It's positive to see that Hyundai Elevator'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 the company's payout ratio, plus analyst estimates of its future dividends.

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 earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're encouraged by the steady growth at Hyundai Elevator, with earnings per share up 4.5% on average over the last five years. Recent earnings growth has been limited. However, companies that see their growth slow can often choose to pay out a greater percentage of earnings to shareholders, which could see the dividend continue to rise.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Hyundai Elevator has lifted its dividend by approximately 1.2% a year on average.

Final Takeaway

Is Hyundai Elevator an attractive dividend stock, or better left on the shelf? Earnings per share have been growing moderately, and Hyundai Elevator is paying out less than half its earnings and cash flow as dividends, which is an attractive combination as it suggests the company is investing in growth. It might be nice to see earnings growing faster, but Hyundai Elevator is being conservative with its dividend payouts and could still perform reasonably over the long run. There's a lot to like about Hyundai Elevator, and we would prioritise taking a closer look at it.

On that note, you'll want to research what risks Hyundai Elevator is facing. To help with this, we've discovered 1 warning sign for Hyundai Elevator that you should be aware of before investing in their shares.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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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