Why You Might Be Interested In HWASEUNG Industries Co.,Ltd. (KRX:006060) For Its Upcoming Dividend

Readers hoping to buy HWASEUNG Industries Co.,Ltd. (KRX:006060) 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 10th of April.

HWASEUNG IndustriesLtd's next dividend payment will be ₩45.00 per share. Last year, in total, the company distributed ₩45.00 to shareholders. Based on the last year's worth of payments, HWASEUNG IndustriesLtd stock has a trailing yield of around 0.6% on the current share price of ₩6940. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether HWASEUNG IndustriesLtd has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for HWASEUNG IndustriesLtd

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. HWASEUNG IndustriesLtd is paying out just 6.2% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. 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 paid out 8.5% of its free cash flow as dividends last year, which is conservatively low.

It's positive to see that HWASEUNG IndustriesLtd'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 HWASEUNG IndustriesLtd paid out over the last 12 months.

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see HWASEUNG IndustriesLtd's earnings per share have risen 12% per annum over the last five years. The company has managed to grow earnings at a rapid rate, while reinvesting most of the profits within the business. This will make it easier to fund future growth efforts and we think this is an attractive combination - plus the dividend can always be increased later.

We'd also point out that HWASEUNG IndustriesLtd issued a meaningful number of new shares in the past year. It's hard to grow dividends per share when a company keeps creating new shares.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, HWASEUNG IndustriesLtd has lifted its dividend by approximately 6.1% 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

Has HWASEUNG IndustriesLtd got what it takes to maintain its dividend payments? HWASEUNG IndustriesLtd has been growing earnings at a rapid rate, and has a conservatively low payout ratio, implying that it is reinvesting heavily in its business; a sterling combination. HWASEUNG IndustriesLtd looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

So while HWASEUNG IndustriesLtd looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - HWASEUNG IndustriesLtd has 2 warning signs we think you should be aware of.

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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