Sunjin Beauty ScienceLtd (KOSDAQ:086710) Has Affirmed Its Dividend Of ₩60.00

Sunjin Beauty Science Co.Ltd (KOSDAQ:086710) has announced that it will pay a dividend of ₩60.00 per share on the 28th of April. This means the annual payment will be 0.6% of the current stock price, which is lower than the industry average.

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Sunjin Beauty ScienceLtd's Future Dividend Projections Appear Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive. Sunjin Beauty ScienceLtd is quite easily earning enough to cover the dividend, however it is being let down by weak cash flows. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.

The next year is set to see EPS grow by 42.2%. If the dividend continues along recent trends, we estimate the payout ratio will be 6.1%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Sunjin Beauty ScienceLtd

Sunjin Beauty ScienceLtd Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 5 years of history we want to see a few more years of history before making any solid conclusions. The dividend has gone from an annual total of ₩10.00 in 2020 to the most recent total annual payment of ₩60.00. This means that it has been growing its distributions at 43% per annum over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Sunjin Beauty ScienceLtd has grown earnings per share at 12% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

In Summary

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. This company is not in the top tier of income providing stocks.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Sunjin Beauty ScienceLtd has 3 warning signs (and 2 which make us uncomfortable) we think you should know about. 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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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.