Korea New Network Co., Ltd. (KOSDAQ:058400) Stock Goes Ex-Dividend In Just Three Days

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 Korea New Network Co., Ltd. (KOSDAQ:058400) 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 as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase Korea New Network's shares before the 27th of December to receive the dividend, which will be paid on the 21st of April.

The company's next dividend payment will be ₩20.00 per share. Last year, in total, the company distributed ₩20.00 to shareholders. Looking at the last 12 months of distributions, Korea New Network has a trailing yield of approximately 2.3% on its current stock price of ₩855.00. If you buy this business for its dividend, you should have an idea of whether Korea New Network's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

View our latest analysis for Korea New Network

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Korea New Network paid out a comfortable 35% of its profit last year. A useful secondary check can be to evaluate whether Korea New Network generated enough free cash flow to afford its dividend. Thankfully its dividend payments took up just 35% of the free cash flow it generated, which is a comfortable payout ratio.

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 Korea New Network paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That explains why we're not overly excited about Korea New Network's flat earnings over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Korea New Network's dividend payments per share have declined at 2.8% per year on average over the past eight years, which is uninspiring.

The Bottom Line

Is Korea New Network an attractive dividend stock, or better left on the shelf? While it's not great to see that earnings per share are effectively flat over the eight-year period we checked, at least the payout ratios are low and conservative. All things considered, we are not particularly enthused about Korea New Network from a dividend perspective.

While it's tempting to invest in Korea New Network for the dividends alone, you should always be mindful of the risks involved. For example - Korea New Network has 2 warning signs we think you should be aware of.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

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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.