Here's What We Like About Hwang Kum Steel & Technology's (KRX:032560) Upcoming 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 Hwang Kum Steel & Technology Co., Ltd (KRX:032560) is about to go ex-dividend in just 3 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Thus, you can purchase Hwang Kum Steel & Technology's shares before the 27th of December in order to receive the dividend, which the company will pay on the 14th of April.

The company's upcoming dividend is ₩150.00 a share, following on from the last 12 months, when the company distributed a total of ₩150 per share to shareholders. Last year's total dividend payments show that Hwang Kum Steel & Technology has a trailing yield of 3.1% on the current share price of ₩4825.00. 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! So we need to check whether the dividend payments are covered, and if earnings are growing.

Check out our latest analysis for Hwang Kum Steel & Technology

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Hwang Kum Steel & Technology paid out just 14% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether Hwang Kum Steel & Technology generated enough free cash flow to afford its dividend. It paid out 19% of its free cash flow as dividends last year, which is conservatively low.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit Hwang Kum Steel & Technology paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see Hwang Kum Steel & Technology earnings per share are up 5.3% per annum over the last five years. Earnings per share have been growing at a decent rate, and the company is retaining more than three-quarters of its earnings in the business. This is an attractive combination, because when profits are reinvested effectively, growth can compound, with corresponding benefits for earnings and dividends in the future.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last five years, Hwang Kum Steel & Technology has lifted its dividend by approximately 30% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

Final Takeaway

Has Hwang Kum Steel & Technology got what it takes to maintain its dividend payments? Earnings per share growth has been growing somewhat, and Hwang Kum Steel & Technology is paying out less than half its earnings and cash flow as dividends. This is interesting for a few reasons, as it suggests management may be reinvesting heavily in the business, but it also provides room to increase the dividend in time. It might be nice to see earnings growing faster, but Hwang Kum Steel & Technology is being conservative with its dividend payouts and could still perform reasonably over the long run. There's a lot to like about Hwang Kum Steel & Technology, and we would prioritise taking a closer look at it.

While it's tempting to invest in Hwang Kum Steel & Technology for the dividends alone, you should always be mindful of the risks involved. For example, we've found 3 warning signs for Hwang Kum Steel & Technology that we recommend you consider before investing in the business.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.