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- KOSE:A136490
There's A Lot To Like About SunjinLtd's (KRX:136490) Upcoming ₩100.00 Dividend
Readers hoping to buy Sunjin Co.,Ltd. (KRX:136490) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. In other words, investors can purchase SunjinLtd's shares before the 27th of December in order to be eligible for the dividend, which will be paid on the 21st of April.
The company's next dividend payment will be ₩100.00 per share, on the back of last year when the company paid a total of ₩100.00 to shareholders. Calculating the last year's worth of payments shows that SunjinLtd has a trailing yield of 1.7% on the current share price of ₩5780.00. If you buy this business for its dividend, you should have an idea of whether SunjinLtd's dividend is reliable and sustainable. As a result, readers should always check whether SunjinLtd has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for SunjinLtd
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. SunjinLtd has a low and conservative payout ratio of just 4.7% of its income after tax. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It paid out 2.6% of its free cash flow as dividends last year, which is conservatively low.
It's positive to see that SunjinLtd's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see how much of its profit SunjinLtd 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. That's why it's comforting to see SunjinLtd's earnings have been skyrocketing, up 23% per annum for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, SunjinLtd looks like a promising growth company.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past nine years, SunjinLtd has increased its dividend at approximately 8.0% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
Final Takeaway
Is SunjinLtd worth buying for its dividend? It's great that SunjinLtd is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. It's a promising combination that should mark this company worthy of closer attention.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 4 warning signs for SunjinLtd that we strongly recommend you have a look at before investing in the company.
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.
About KOSE:A136490
SunjinLtd
Produces and sells prepared animal feed in South Korea and internationally.
Good value with adequate balance sheet.