Income Investors Should Know That Sejong Medical Co., Ltd. (KOSDAQ:258830) Goes Ex-Dividend Soon

Sejong Medical Co., Ltd. (KOSDAQ:258830) stock is about to trade ex-dividend in three days. This means that investors who purchase shares on or after the 29th of December will not receive the dividend, which will be paid on the 20th of April.

Sejong Medical'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. Based on the last year's worth of payments, Sejong Medical stock has a trailing yield of around 0.7% on the current share price of ₩14000. If you buy this business for its dividend, you should have an idea of whether Sejong Medical's dividend is reliable and sustainable. So we need to investigate whether Sejong Medical can afford its dividend, and if the dividend could grow.

View our latest analysis for Sejong Medical

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. That's why it's good to see Sejong Medical paying out a modest 39% of its earnings. 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.

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

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Sejong Medical's earnings per share have fallen at approximately 20% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

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

The Bottom Line

Should investors buy Sejong Medical for the upcoming dividend? It's disappointing to see earnings per share declining, and this would ordinarily be enough to discourage us from most dividend stocks, even though Sejong Medical is paying out less than half its income as dividends. However, it's also paying out an uncomfortably high percentage of its cash flow, which makes us wonder just how sustainable the dividend really is. It's not that we think Sejong Medical is a bad company, but these characteristics don't generally lead to outstanding dividend performance.

With that being said, if you're still considering Sejong Medical as an investment, you'll find it beneficial to know what risks this stock is facing. For instance, we've identified 4 warning signs for Sejong Medical (1 is a bit unpleasant) you should be aware of.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising 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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