Why It Might Not Make Sense To Buy GOLFZON NEWDIN HOLDINGS Co., Ltd. (KOSDAQ:121440) For Its Upcoming Dividend

Readers hoping to buy GOLFZON NEWDIN HOLDINGS Co., Ltd. (KOSDAQ:121440) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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 10th of April.

GOLFZON NEWDIN HOLDINGS's next dividend payment will be ₩117 per share, and in the last 12 months, the company paid a total of ₩117 per share. Looking at the last 12 months of distributions, GOLFZON NEWDIN HOLDINGS has a trailing yield of approximately 2.1% on its current stock price of ₩5560. If you buy this business for its dividend, you should have an idea of whether GOLFZON NEWDIN HOLDINGS's dividend is reliable and sustainable. As a result, readers should always check whether GOLFZON NEWDIN HOLDINGS has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for GOLFZON NEWDIN HOLDINGS

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. GOLFZON NEWDIN HOLDINGS lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. 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. It distributed 29% of its free cash flow as dividends, a comfortable payout level for most companies.

Click here to see how much of its profit GOLFZON NEWDIN HOLDINGS paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. GOLFZON NEWDIN HOLDINGS reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.

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

Get our latest analysis on GOLFZON NEWDIN HOLDINGS's balance sheet health here.

The Bottom Line

Has GOLFZON NEWDIN HOLDINGS got what it takes to maintain its dividend payments? First, it's not great to see the company paying a dividend despite being loss-making over the last year. On the plus side, the dividend was covered by free cash flow." Overall it doesn't look like the most suitable dividend stock for a long-term buy and hold investor.

So if you're still interested in GOLFZON NEWDIN HOLDINGS despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. For example, we've found 2 warning signs for GOLFZON NEWDIN HOLDINGS (1 is potentially serious!) that deserve your attention before investing in the shares.

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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