Just Three Days Till NEOWIZ HOLDINGS Corporation (KOSDAQ:042420) Will Be Trading Ex-Dividend

NEOWIZ HOLDINGS Corporation (KOSDAQ:042420) is about to trade ex-dividend in the next three days. This means that investors who purchase shares on or after the 29th of December will not receive the dividend, which will be paid on the 6th of April.

NEOWIZ HOLDINGS's upcoming dividend is ₩123 a share, following on from the last 12 months, when the company distributed a total of ₩123 per share to shareholders. Last year's total dividend payments show that NEOWIZ HOLDINGS has a trailing yield of 0.8% on the current share price of ₩16150. 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 investigate whether NEOWIZ HOLDINGS can afford its dividend, and if the dividend could grow.

Check out our latest analysis for NEOWIZ HOLDINGS

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. NEOWIZ HOLDINGS paid out just 2.2% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. The good news is it paid out just 1.8% of its free cash flow in the last year.

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 NEOWIZ HOLDINGS paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That explains why we're not overly excited about NEOWIZ HOLDINGS's flat earnings over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

Given that NEOWIZ HOLDINGS has only been paying a dividend for a year, there's not much of a past history to draw insight from.

Final Takeaway

Is NEOWIZ HOLDINGS worth buying for its dividend? Earnings per share have been flat, 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 gets cut. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example - NEOWIZ HOLDINGS has 1 warning sign we think you should be aware of.

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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