There's A Lot To Like About Wonpoong's (KOSDAQ:008370) Upcoming ₩220.00 Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Wonpoong Corporation (KOSDAQ:008370) is about to trade ex-dividend in the next three days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Wonpoong's shares before the 27th of December in order to be eligible for the dividend, which will be paid on the 14th of April.

The company's upcoming dividend is ₩220.00 a share, following on from the last 12 months, when the company distributed a total of ₩220 per share to shareholders. Based on the last year's worth of payments, Wonpoong stock has a trailing yield of around 5.3% on the current share price of ₩4125.00. If you buy this business for its dividend, you should have an idea of whether Wonpoong's dividend is reliable and sustainable. As a result, readers should always check whether Wonpoong has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Wonpoong

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Wonpoong paid out a comfortable 35% of its profit last year. 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. Thankfully its dividend payments took up just 39% of the free cash flow it generated, which is a comfortable payout ratio.

It's positive to see that Wonpoong'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 how much of its profit Wonpoong paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see Wonpoong has grown its earnings rapidly, up 28% a year for the past five years. Wonpoong is paying out less than half its earnings and cash flow, while simultaneously growing earnings per share at a rapid clip. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, five years ago, Wonpoong has lifted its dividend by approximately 8.0% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

Is Wonpoong worth buying for its dividend? We love that Wonpoong is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. These characteristics suggest the company is reinvesting in growing its business, while the conservative payout ratio also implies a reduced risk of the dividend being cut in the future. Wonpoong looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

In light of that, while Wonpoong has an appealing dividend, it's worth knowing the risks involved with this stock. For example - Wonpoong has 1 warning sign we think you should be aware of.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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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.