DSC Investment Inc. (KOSDAQ:241520) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

DSC Investment Inc. (KOSDAQ:241520) stock is about to trade ex-dividend in 3 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Therefore, if you purchase DSC Investment's shares on or after the 27th of December, you won't be eligible to receive the dividend, when it is paid on the 17th of April.

The company's next dividend payment will be ₩40.00 per share, on the back of last year when the company paid a total of ₩40.00 to shareholders. Based on the last year's worth of payments, DSC Investment stock has a trailing yield of around 1.4% on the current share price of ₩2935.00. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether DSC Investment has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for DSC Investment

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. DSC Investment paid out just 7.7% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. DSC Investment paid a dividend despite reporting negative free cash flow over the last twelve months. This may be due to heavy investment in the business, but this is still suboptimal from a dividend sustainability perspective.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit DSC Investment 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see DSC Investment's earnings have been skyrocketing, up 21% per annum for the past five years.

Unfortunately DSC Investment has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

Final Takeaway

Is DSC Investment an attractive dividend stock, or better left on the shelf? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. We think this is a pretty attractive combination, and would be interested in investigating DSC Investment more closely.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example - DSC Investment has 3 warning signs we think you should be aware of.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are 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.