SAMRYOONGLtd (KOSDAQ:014970) Will Pay A Dividend Of ₩75.00

The board of SAMRYOONG Co.,Ltd (KOSDAQ:014970) has announced that it will pay a dividend of ₩75.00 per share on the 20th of April. Including this payment, the dividend yield on the stock will be 1.2%, which is a modest boost for shareholders' returns.

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SAMRYOONGLtd's Distributions May Be Difficult To Sustain

If it is predictable over a long period, even low dividend yields can be attractive. SAMRYOONGLtd is not generating a profit, but its free cash flows easily cover the dividend, leaving plenty for reinvestment in the business. In general, cash flows are more important than the more traditional measures of profit so we feel pretty comfortable with the dividend at this level.

Looking forward, earnings per share could rise by 12.5% over the next year if the trend from the last few years continues. We like to see the company moving towards profitability, but this probably won't be enough for it to post positive net income this year. The healthy cash flows are definitely as good sign, though so we wouldn't panic just yet, especially with the earnings growing.

See our latest analysis for SAMRYOONGLtd

SAMRYOONGLtd Is Still Building Its Track Record

It is great to see that SAMRYOONGLtd has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The payments haven't really changed that much since 6 years ago. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

The Company Could Face Some Challenges Growing The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. SAMRYOONGLtd has impressed us by growing EPS at 13% per year over the past five years. It's not great that the company is not turning a profit, but the decent growth in recent years is certainly a positive sign. Assuming the company can post positive net income numbers soon, it could has the potential to be a decent dividend payer.

Our Thoughts On SAMRYOONGLtd's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about SAMRYOONGLtd's payments, as there could be some issues with sustaining them into the future. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. We would be a touch cautious of relying on this stock primarily for the dividend income.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 2 warning signs for SAMRYOONGLtd that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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