Korea New Network (KOSDAQ:058400) Will Pay A Dividend Of ₩20.00

Korea New Network Co., Ltd. (KOSDAQ:058400) will pay a dividend of ₩20.00 on the 20th of April. This payment means the dividend yield will be 2.8%, which is below the average for the industry.

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Korea New Network's Future Dividend Projections Appear Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive. The last dividend was quite easily covered by Korea New Network's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS could expand by 1.8% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 42%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Korea New Network

Korea New Network's Dividend Has Lacked Consistency

Korea New Network has been paying dividends for a while, but the track record isn't stellar. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. The annual payment during the last 9 years was ₩25.00 in 2016, and the most recent fiscal year payment was ₩20.00. The dividend has shrunk at around 2.4% a year during that period. A company that decreases its dividend over time generally isn't what we are looking for.

The Dividend's Growth Prospects Are Limited

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Korea New Network hasn't seen much change in its earnings per share over the last five years. The company has been growing at a pretty soft 1.8% per annum, and is paying out quite a lot of its earnings to shareholders. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future.

Our Thoughts On Korea New Network's Dividend

Overall, we think Korea New Network is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 2 warning signs for Korea New Network that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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