NOROO PAINT & COATINGS Co., Ltd. (KRX:090350) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

NOROO PAINT & COATINGS Co., Ltd. (KRX:090350) is about to trade ex-dividend in the next three days. You can purchase shares before the 29th of December in order to receive the dividend, which the company will pay on the 17th of April.

NOROO PAINT & COATINGS's next dividend payment will be ₩275 per share, on the back of last year when the company paid a total of ₩275 to shareholders. Based on the last year's worth of payments, NOROO PAINT & COATINGS has a trailing yield of 3.0% on the current stock price of ₩9180. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for NOROO PAINT & COATINGS

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. NOROO PAINT & COATINGS paid out a comfortable 32% of its profit last year. 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. Fortunately, it paid out only 27% of its free cash flow in the past year.

It's positive to see that NOROO PAINT & COATINGS'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 NOROO PAINT & COATINGS paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see NOROO PAINT & COATINGS earnings per share are up 2.9% per annum over the last five years. Earnings per share growth in recent times has not been a standout. Yet there are several ways to grow the dividend, and one of them is simply that the company may choose to pay out more of its earnings as dividends.

Unfortunately NOROO PAINT & COATINGS 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

Is NOROO PAINT & COATINGS worth buying for its dividend? Earnings per share have been growing moderately, and NOROO PAINT & COATINGS is paying out less than half its earnings and cash flow as dividends, which is an attractive combination as it suggests the company is investing in growth. It might be nice to see earnings growing faster, but NOROO PAINT & COATINGS is being conservative with its dividend payouts and could still perform reasonably over the long run. There's a lot to like about NOROO PAINT & COATINGS, and we would prioritise taking a closer look at it.

So while NOROO PAINT & COATINGS 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 3 warning signs for NOROO PAINT & COATINGS (1 is concerning!) that you ought to be aware of before buying the shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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