Interested In Doosan Bobcat's (KRX:241560) Upcoming ₩600 Dividend? You Have Three Days Left

Doosan Bobcat Inc. (KRX:241560) stock is about to trade ex-dividend in 3 days. Investors can purchase shares before the 29th of December in order to be eligible for this dividend, which will be paid on the 23rd of April.

Doosan Bobcat's next dividend payment will be ₩600 per share, on the back of last year when the company paid a total of ₩1,200 to shareholders. Calculating the last year's worth of payments shows that Doosan Bobcat has a trailing yield of 4.0% on the current share price of ₩30000. 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.

View our latest analysis for Doosan Bobcat

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Doosan Bobcat paying out a modest 32% of its earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Luckily it paid out just 18% of its free cash flow 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?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's not ideal to see Doosan Bobcat's earnings per share have been shrinking at 4.9% a year over the previous five years.

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

Final Takeaway

Has Doosan Bobcat got what it takes to maintain its dividend payments? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be 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.

On that note, you'll want to research what risks Doosan Bobcat is facing. In terms of investment risks, we've identified 2 warning signs with Doosan Bobcat and understanding them should be part of your investment process.

If you're in the market for dividend stocks, we recommend checking our list of top 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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