Jeil Pharma Holdings Inc (KRX:002620) Pays A ₩50.00 Dividend In Just Two Days

Jeil Pharma Holdings Inc (KRX:002620) is about to trade ex-dividend in the next 2 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. In other words, investors can purchase Jeil Pharma Holdings' shares before the 27th of December in order to be eligible for the dividend, which will be paid on the 18th of April.

The company's next dividend payment will be ₩50.00 per share, and in the last 12 months, the company paid a total of ₩50.00 per share. Based on the last year's worth of payments, Jeil Pharma Holdings has a trailing yield of 0.6% on the current stock price of ₩7920.00. If you buy this business for its dividend, you should have an idea of whether Jeil Pharma Holdings's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Jeil Pharma 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. Jeil Pharma Holdings reported a loss after tax last year, which means it's paying a dividend despite being unprofitable. While this might be a one-off event, this is unlikely to be sustainable in the long term. Given that the company reported a loss last year, we now need to see if it generated enough free cash flow to fund the dividend. If cash earnings don't cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable. The good news is it paid out just 14% of its free cash flow in the last year.

Click here to see how much of its profit Jeil Pharma Holdings paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Jeil Pharma Holdings was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Jeil Pharma Holdings has seen its dividend decline 4.7% per annum on average over the past seven years, which is not great to see.

We update our analysis on Jeil Pharma Holdings every 24 hours, so you can always get the latest insights on its financial health, here.

The Bottom Line

Should investors buy Jeil Pharma Holdings for the upcoming dividend? It's hard to get used to Jeil Pharma Holdings paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however. Overall, it's hard to get excited about Jeil Pharma Holdings from a dividend perspective.

If you're not too concerned about Jeil Pharma Holdings's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. Our analysis shows 1 warning sign for Jeil Pharma Holdings and you should be aware of this before buying any shares.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.