Just Four Days Till Dong-Ah Geological Engineering Company Ltd. (KRX:028100) Will Be Trading Ex-Dividend

It looks like Dong-Ah Geological Engineering Company Ltd. (KRX:028100) is about to go ex-dividend in the next four days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase Dong-Ah Geological Engineering's shares before the 7th of March in order to receive the dividend, which the company will pay on the 11th of April.

The company's next dividend payment will be ₩500.00 per share, and in the last 12 months, the company paid a total of ₩500 per share. Based on the last year's worth of payments, Dong-Ah Geological Engineering has a trailing yield of 3.7% on the current stock price of ₩13690.00. If you buy this business for its dividend, you should have an idea of whether Dong-Ah Geological Engineering's dividend is reliable and sustainable. As a result, readers should always check whether Dong-Ah Geological Engineering has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Dong-Ah Geological Engineering

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. Dong-Ah Geological Engineering paid out more than half (68%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It distributed 46% of its free cash flow as dividends, a comfortable payout level for most companies.

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 how much of its profit Dong-Ah Geological Engineering paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. Dong-Ah Geological Engineering's earnings per share have fallen at approximately 15% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Dong-Ah Geological Engineering has increased its dividend at approximately 11% a year on average. Growing the dividend payout ratio while earnings are declining can deliver nice returns for a while, but it's always worth checking for when the company can't increase the payout ratio any more - because then the music stops.

The Bottom Line

Has Dong-Ah Geological Engineering got what it takes to maintain its dividend payments? We're not enthused by the declining earnings per share, although at least the company's payout ratio is within a reasonable range, meaning it may not be at imminent risk of a dividend cut. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're not all that optimistic on its dividend prospects.

So if you want to do more digging on Dong-Ah Geological Engineering, you'll find it worthwhile knowing the risks that this stock faces. Be aware that Dong-Ah Geological Engineering is showing 2 warning signs in our investment analysis, and 1 of those is significant...

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.