Korea Ratings Co., Ltd. (KOSDAQ:034950) Is About To Go Ex-Dividend, And It Pays A 7.6% Yield

Readers hoping to buy Korea Ratings Co., Ltd. (KOSDAQ:034950) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. If you purchase the stock on or after the 29th of December, you won't be eligible to receive this dividend, when it is paid on the 20th of April.

Korea Ratings's next dividend payment will be ₩8,518 per share, on the back of last year when the company paid a total of ₩8,618 to shareholders. Based on the last year's worth of payments, Korea Ratings stock has a trailing yield of around 7.6% on the current share price of ₩114000. 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.

View our latest analysis for Korea Ratings

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Korea Ratings distributed an unsustainably high 196% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious.

When the dividend payout ratio is high, as it is in this case, the dividend is usually at greater risk of being cut in the future.

Click here to see how much of its profit Korea Ratings paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Korea Ratings's earnings per share have been growing at 11% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Korea Ratings has lifted its dividend by approximately 23% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

Is Korea Ratings an attractive dividend stock, or better left on the shelf? It's been growing earnings per share at a pleasant rate, although its dividend payout was not well covered by earnings. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're on the fence about its dividend prospects.

With that being said, if dividends aren't your biggest concern with Korea Ratings, you should know about the other risks facing this business. To help with this, we've discovered 1 warning sign for Korea Ratings that you should be aware of before investing in their shares.

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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