AJU IB INVESTMENT (KOSDAQ:027360) Has Affirmed Its Dividend Of ₩50.00

The board of AJU IB INVESTMENT Co., Ltd. (KOSDAQ:027360) has announced that it will pay a dividend of ₩50.00 per share on the 16th of April. Including this payment, the dividend yield on the stock will be 2.5%, which is a modest boost for shareholders' returns.

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AJU IB INVESTMENT's Future Dividends May Potentially Be At Risk

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Prior to this announcement, the company was paying out 203% of what it was earning. It will be difficult to sustain this level of payout so we wouldn't be confident about this continuing.

If the company can't turn things around, EPS could fall by 27.8% over the next year. If the dividend continues along recent trends, we estimate the payout ratio could reach 310%, which could put the dividend in jeopardy if the company's earnings don't improve.

See our latest analysis for AJU IB INVESTMENT

AJU IB INVESTMENT's Dividend Has Lacked Consistency

Even in its relatively short history, the company has reduced the dividend at least once. This makes us cautious about the consistency of the dividend over a full economic cycle. The dividend has gone from an annual total of ₩25.00 in 2019 to the most recent total annual payment of ₩50.00. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

Dividend Growth Potential Is Shaky

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Earnings per share has been sinking by 28% over the last five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future.

We're Not Big Fans Of AJU IB INVESTMENT's Dividend

Overall, while some might be pleased that the dividend wasn't cut, we think this may help AJU IB INVESTMENT make more consistent payments in the future. The company's earnings aren't high enough to be making such big distributions, and it isn't backed up by strong growth or consistency either. We don't think that this is a great candidate to be an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 3 warning signs for AJU IB INVESTMENT you should be aware of, and 2 of them can't be ignored. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.