TAEYANG Corporation (KOSDAQ:053620) Looks Interesting, And It's About To Pay A Dividend

TAEYANG Corporation (KOSDAQ:053620) is about to trade ex-dividend in the next three days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Thus, you can purchase TAEYANG's shares before the 27th of December in order to receive the dividend, which the company will pay on the 14th of April.

The company's next dividend payment will be ₩380.00 per share, and in the last 12 months, the company paid a total of ₩380 per share. Looking at the last 12 months of distributions, TAEYANG has a trailing yield of approximately 5.9% on its current stock price of ₩6470.00. If you buy this business for its dividend, you should have an idea of whether TAEYANG's dividend is reliable and sustainable. So we need to investigate whether TAEYANG can afford its dividend, and if the dividend could grow.

See our latest analysis for TAEYANG

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. TAEYANG is paying out an acceptable 69% of its profit, a common payout level among most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Fortunately, it paid out only 31% of its free cash flow in the past year.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit TAEYANG 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, TAEYANG's earnings per share have been growing at 19% a year for the past five years. TAEYANG has an average payout ratio which suggests a balance between growing earnings and rewarding shareholders. Given the quick rate of earnings per share growth and current level of payout, there may be a chance of further dividend increases in the future.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past five years, TAEYANG has increased its dividend at approximately 31% 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 TAEYANG an attractive dividend stock, or better left on the shelf? TAEYANG's growing earnings per share and conservative payout ratios make for a decent combination. We also like that it paid out a lower percentage of its cash flow. TAEYANG looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

On that note, you'll want to research what risks TAEYANG is facing. We've identified 2 warning signs with TAEYANG (at least 1 which is significant), and understanding these should be part of your investment process.

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.