Dongkuk Refractories & Steel Co., Ltd. (KOSDAQ:075970) Stock Goes Ex-Dividend In Just Three Days

Readers hoping to buy Dongkuk Refractories & Steel Co., Ltd. (KOSDAQ:075970) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Investors can purchase shares before the 29th of December in order to be eligible for this dividend, which will be paid on the 20th of April.

Dongkuk Refractories & Steel's upcoming dividend is ₩80.00 a share, following on from the last 12 months, when the company distributed a total of ₩80.00 per share to shareholders. Based on the last year's worth of payments, Dongkuk Refractories & Steel stock has a trailing yield of around 2.4% on the current share price of ₩3295. If you buy this business for its dividend, you should have an idea of whether Dongkuk Refractories & Steel's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Dongkuk Refractories & Steel

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Dongkuk Refractories & Steel is paying out an acceptable 62% of its profit, a common payout level among most companies. 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. Thankfully its dividend payments took up just 28% of the free cash flow it generated, which is a comfortable payout ratio.

It's positive to see that Dongkuk Refractories & Steel'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 Dongkuk Refractories & Steel 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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at Dongkuk Refractories & Steel, with earnings per share up 4.0% on average over the last five years. Earnings growth has been slim and the company is paying out more than half of its earnings. While there is some room to both increase the payout ratio and reinvest in the business, generally the higher a payout ratio goes, the lower a company's prospects for future growth.

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

To Sum It Up

Is Dongkuk Refractories & Steel worth buying for its dividend? Earnings per share growth has been modest and Dongkuk Refractories & Steel paid out over half of its profits and less than half of its free cash flow, although both payout ratios are within normal limits. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Dongkuk Refractories & Steel's dividend merits.

So while Dongkuk Refractories & Steel looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To help with this, we've discovered 2 warning signs for Dongkuk Refractories & Steel 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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