Four Days Left Until Hyundai Green Food Co.,Ltd. (KRX:005440) Trades Ex-Dividend

Hyundai Green Food Co.,Ltd. (KRX:005440) is about to trade ex-dividend in the next four days. You will need to purchase shares before the 29th of December to receive the dividend, which will be paid on the 29th of April.

Hyundai Green FoodLtd's next dividend payment will be ₩210 per share. Last year, in total, the company distributed ₩210 to shareholders. Based on the last year's worth of payments, Hyundai Green FoodLtd stock has a trailing yield of around 2.4% on the current share price of ₩8910. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Hyundai Green FoodLtd

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Hyundai Green FoodLtd's payout ratio is modest, at just 44% of profit. A useful secondary check can be to evaluate whether Hyundai Green FoodLtd generated enough free cash flow to afford its dividend. Thankfully its dividend payments took up just 35% of the free cash flow it generated, which is a comfortable payout ratio.

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?

Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Readers will understand then, why we're concerned to see Hyundai Green FoodLtd's earnings per share have dropped 16% a year over the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Hyundai Green FoodLtd has delivered 15% dividend growth per year on average over the past 10 years.

Final Takeaway

Is Hyundai Green FoodLtd an attractive dividend stock, or better left on the shelf? Hyundai Green FoodLtd has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. In summary, it's hard to get excited about Hyundai Green FoodLtd from a dividend perspective.

On that note, you'll want to research what risks Hyundai Green FoodLtd is facing. For instance, we've identified 3 warning signs for Hyundai Green FoodLtd (1 can't be ignored) you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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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