Just Four Days Till Samhwa Paints Industrial Co., Ltd. (KRX:000390) Will Be Trading Ex-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 Samhwa Paints Industrial Co., Ltd. (KRX:000390) is about to go ex-dividend in just 4 days. Ex-dividend means that investors that purchase the stock on or after the 29th of December will not receive this dividend, which will be paid on the 7th of April.

Samhwa Paints Industrial's upcoming dividend is ₩125 a share, following on from the last 12 months, when the company distributed a total of ₩125 per share to shareholders. Based on the last year's worth of payments, Samhwa Paints Industrial has a trailing yield of 0.9% on the current stock price of ₩13550. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Samhwa Paints Industrial has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Samhwa Paints Industrial

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Samhwa Paints Industrial paid out a comfortable 49% of its profit last year. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Dividends consumed 64% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

It's positive to see that Samhwa Paints Industrial'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 Samhwa Paints Industrial paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. Samhwa Paints Industrial's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 31% a year over the past five years.

Unfortunately Samhwa Paints Industrial has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

Final Takeaway

Has Samhwa Paints Industrial got what it takes to maintain its dividend payments? Earnings per share have fallen significantly, although at least Samhwa Paints Industrial paid out less than half of its profits and free cash flow over the last year, leaving some margin of safety. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Samhwa Paints Industrial's dividend merits.

So if you want to do more digging on Samhwa Paints Industrial, you'll find it worthwhile knowing the risks that this stock faces. To help with this, we've discovered 4 warning signs for Samhwa Paints Industrial (2 are potentially serious!) that you ought to be aware of before buying the shares.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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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