HWASEUNG IndustriesLtd (KRX:006060) Is Due To Pay A Dividend Of ₩200.00

The board of HWASEUNG Industries Co.,Ltd. (KRX:006060) has announced that it will pay a dividend on the 6th of April, with investors receiving ₩200.00 per share. Based on this payment, the dividend yield on the company's stock will be 5.4%, which is an attractive boost to shareholder returns.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

HWASEUNG IndustriesLtd's Future Dividend Projections Appear Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Prior to this announcement, HWASEUNG IndustriesLtd's dividend was comfortably covered by both cash flow and earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

EPS is set to fall by 9.0% over the next 12 months if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio could be 56%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

See our latest analysis for HWASEUNG IndustriesLtd

HWASEUNG IndustriesLtd Is Still Building Its Track Record

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. Since 2019, the annual payment back then was ₩40.00, compared to the most recent full-year payment of ₩200.00. This works out to be a compound annual growth rate (CAGR) of approximately 31% a year over that time. HWASEUNG IndustriesLtd has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

Dividend Growth May Be Hard To Come By

Investors could be attracted to the stock based on the quality of its payment history. However, initial appearances might be deceiving. In the last five years, HWASEUNG IndustriesLtd's earnings per share has shrunk at approximately 9.0% per annum. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.

Our Thoughts On HWASEUNG IndustriesLtd's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The company is generating plenty of cash, which could maintain the dividend for a while, but the track record hasn't been great. We don't think HWASEUNG IndustriesLtd is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 2 warning signs for HWASEUNG IndustriesLtd that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.