Eugene Investment & SecuritiesLtd (KRX:001200) Has Announced That It Will Be Increasing Its Dividend To ₩100.00

Eugene Investment & Securities Co.,Ltd.'s (KRX:001200) dividend will be increasing from last year's payment of the same period to ₩100.00 on 1st of January. Even though the dividend went up, the yield is still quite low at only 2.3%.

Check out our latest analysis for Eugene Investment & SecuritiesLtd

Eugene Investment & SecuritiesLtd's Future Dividend Projections Appear Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end. Based on the last payment, Eugene Investment & SecuritiesLtd was earning enough to cover the dividend, but free cash flows weren't positive. With the company not bringing in any cash, paying out to shareholders is bound to become difficult at some point.

Looking forward, earnings per share could rise by 3.6% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 30% by next year, which we think can be pretty sustainable going forward.

Eugene Investment & SecuritiesLtd's Dividend Has Lacked Consistency

Eugene Investment & SecuritiesLtd has been paying dividends for a while, but the track record isn't stellar. This makes us cautious about the consistency of the dividend over a full economic cycle. The last annual payment of ₩60.00 was flat on the annual payment from6 years ago. It's encouraging to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth anyway, which makes this less attractive as an income investment.

Eugene Investment & SecuritiesLtd May Find It Hard To Grow The Dividend

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Earnings has been rising at 3.6% per annum over the last five years, which admittedly is a bit slow. While growth may be thin on the ground, Eugene Investment & SecuritiesLtd could always pay out a higher proportion of earnings to increase shareholder returns.

In Summary

Overall, we always like to see the dividend being raised, but we don't think Eugene Investment & SecuritiesLtd will make a great income stock. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. This company is not in the top tier of income providing stocks.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 3 warning signs for Eugene Investment & SecuritiesLtd you should be aware of, and 1 of them is a bit concerning. 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.