Kukbo Design (KOSDAQ:066620) Has Affirmed Its Dividend Of ₩500.00

The board of Kukbo Design Co., Ltd. (KOSDAQ:066620) has announced that it will pay a dividend of ₩500.00 per share on the 27th of April. This means the annual payment will be 2.4% of the current stock price, which is lower than the industry average.

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Kukbo Design's Future Dividend Projections Appear Well Covered By Earnings

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, prior to this announcement, Kukbo Design's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 12.4% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 8.8% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Kukbo Design

Kukbo Design Doesn't Have A Long Payment History

Kukbo Design's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 6 years was ₩280.00 in 2019, and the most recent fiscal year payment was ₩500.00. This implies that the company grew its distributions at a yearly rate of about 10% over that duration. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Kukbo Design has seen EPS rising for the last five years, at 12% per annum. Kukbo Design definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Kukbo Design Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

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. Taking the debate a bit further, we've identified 1 warning sign for Kukbo Design that investors need to be conscious of moving forward. Is Kukbo Design not quite the opportunity you were looking for? Why not check out 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.