There's A Lot To Like About DB Insurance's (KRX:005830) Upcoming ₩1,500 Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that DB Insurance Co., Ltd. (KRX:005830) is about to go ex-dividend in just 4 days. You can purchase shares before the 29th of December in order to receive the dividend, which the company will pay on the 27th of March.

DB Insurance's next dividend payment will be ₩1,500 per share. Last year, in total, the company distributed ₩1,500 to shareholders. Calculating the last year's worth of payments shows that DB Insurance has a trailing yield of 3.3% on the current share price of ₩45000. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether DB Insurance can afford its dividend, and if the dividend could grow.

View our latest analysis for DB Insurance

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. DB Insurance has a low and conservative payout ratio of just 17% of its income after tax.

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 the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see DB Insurance earnings per share are up 6.2% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, DB Insurance has lifted its dividend by approximately 7.2% 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.

The Bottom Line

Should investors buy DB Insurance for the upcoming dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. DB Insurance ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

In light of that, while DB Insurance has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 1 warning sign for DB Insurance that you should be aware of before investing in their shares.

If you're in the market for dividend stocks, we recommend checking our list of top 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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