Here's Why We're Wary Of Buying Aplus Asset Advisor's (KRX:244920) For Its Upcoming Dividend

It looks like Aplus Asset Advisor Co. Ltd (KRX:244920) is about to go ex-dividend in the next 3 days. 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Thus, you can purchase Aplus Asset Advisor's shares before the 27th of December in order to receive the dividend, which the company will pay on the 11th of April.

The company's next dividend payment will be ₩200.00 per share. Last year, in total, the company distributed ₩200 to shareholders. Looking at the last 12 months of distributions, Aplus Asset Advisor has a trailing yield of approximately 4.5% on its current stock price of ₩4490.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Aplus Asset Advisor

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Aplus Asset Advisor reported a loss last year, so it's not great to see that it has continued paying a dividend.

Click here to see how much of its profit Aplus Asset Advisor paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings fall far enough, the company could be forced to cut its dividend. Aplus Asset Advisor was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Aplus Asset Advisor has seen its dividend decline 13% per annum on average over the past four years, which is not great to see.

We update our analysis on Aplus Asset Advisor every 24 hours, so you can always get the latest insights on its financial health, here.

Final Takeaway

Has Aplus Asset Advisor got what it takes to maintain its dividend payments? It's not great to see the company paying a dividend despite being loss-making over the last year. All things considered, we're not optimistic about its dividend prospects, and would be inclined to leave it on the shelf for now.

With that being said, if you're still considering Aplus Asset Advisor as an investment, you'll find it beneficial to know what risks this stock is facing. In terms of investment risks, we've identified 2 warning signs with Aplus Asset Advisor and understanding them should be part of your investment process.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.