Three Days Left Until Seoulin Bioscience Co.,Ltd. (KOSDAQ:038070) Trades Ex-Dividend

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 Seoulin Bioscience Co.,Ltd. (KOSDAQ:038070) is about to go ex-dividend in just three days. Investors can purchase shares before the 29th of December in order to be eligible for this dividend, which will be paid on the 17th of April.

Seoulin BioscienceLtd's next dividend payment will be ₩93.52 per share. Last year, in total, the company distributed ₩100.00 to shareholders. Based on the last year's worth of payments, Seoulin BioscienceLtd has a trailing yield of 0.8% on the current stock price of ₩12950. 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 check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Seoulin BioscienceLtd

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Seoulin BioscienceLtd paid out just 18% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether Seoulin BioscienceLtd generated enough free cash flow to afford its dividend. It paid out 109% of its free cash flow in the form of dividends last year, which is outside the comfort zone for most businesses. Cash flows are usually much more volatile than earnings, so this could be a temporary effect - but we'd generally want look more closely here.

Seoulin BioscienceLtd does have a large net cash position on the balance sheet, which could fund large dividends for a time, if the company so chose. Still, smart investors know that it is better to assess dividends relative to the cash and profit generated by the business. Paying dividends out of cash on the balance sheet is not long-term sustainable.

Seoulin BioscienceLtd paid out less in dividends than it reported in profits, but unfortunately it didn't generate enough cash to cover the dividend. Cash is king, as they say, and were Seoulin BioscienceLtd to repeatedly pay dividends that aren't well covered by cashflow, we would consider this a warning sign.

Click here to see how much of its profit Seoulin BioscienceLtd 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 Seoulin BioscienceLtd earnings per share are up 7.4% per annum over the last five years. Earnings have been growing at a steady rate, but we're concerned dividend payments consumed most of the company's cash flow over the past year.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Seoulin BioscienceLtd has increased its dividend at approximately 7.2% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

Final Takeaway

Is Seoulin BioscienceLtd an attractive dividend stock, or better left on the shelf? Seoulin BioscienceLtd delivered reasonable earnings per share growth in recent times, and paid out less than half its profits and 109% of its cash flow over the last year, which is a mediocre outcome. In summary, it's hard to get excited about Seoulin BioscienceLtd from a dividend perspective.

So if you want to do more digging on Seoulin BioscienceLtd, you'll find it worthwhile knowing the risks that this stock faces. For example, we've found 2 warning signs for Seoulin BioscienceLtd that we recommend you consider before investing in the business.

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.

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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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