Read This Before Considering DIGITAL CHOSUN Inc. (KOSDAQ:033130) For Its Upcoming ₩30.00 Dividend

DIGITAL CHOSUN Inc. (KOSDAQ:033130) stock is about to trade ex-dividend in 3 days. You can purchase shares before the 29th of December in order to receive the dividend, which the company will pay on the 10th of April.

DIGITAL CHOSUN's next dividend payment will be ₩30.00 per share, on the back of last year when the company paid a total of ₩30.00 to shareholders. Based on the last year's worth of payments, DIGITAL CHOSUN has a trailing yield of 1.1% on the current stock price of ₩2825. If you buy this business for its dividend, you should have an idea of whether DIGITAL CHOSUN's dividend is reliable and sustainable. So we need to investigate whether DIGITAL CHOSUN can afford its dividend, and if the dividend could grow.

Check out our latest analysis for DIGITAL CHOSUN

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see DIGITAL CHOSUN paying out a modest 38% of its earnings. 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. It paid out 23% of its free cash flow as dividends last year, which is conservatively low.

It's positive to see that DIGITAL CHOSUN'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 DIGITAL CHOSUN paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. So we're not too excited that DIGITAL CHOSUN's earnings are down 3.0% a year over the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, DIGITAL CHOSUN has lifted its dividend by approximately 4.1% a year on average.

Final Takeaway

Is DIGITAL CHOSUN worth buying for its dividend? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.

So while DIGITAL CHOSUN 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 DIGITAL CHOSUN (1 is a bit concerning!) that you ought to be aware of before buying the 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.

When trading DIGITAL CHOSUN or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.