Interested In Savezone I&C's (KRX:067830) Upcoming ₩30.00 Dividend? You Have Three Days Left

It looks like Savezone I&C Corporation (KRX:067830) is about to go ex-dividend in the next 3 days. You will need to purchase shares before the 29th of December to receive the dividend, which will be paid on the 17th of April.

Savezone I&C's next dividend payment will be ₩30.00 per share. Last year, in total, the company distributed ₩30.00 to shareholders. Based on the last year's worth of payments, Savezone I&C stock has a trailing yield of around 1.1% on the current share price of ₩2855. If you buy this business for its dividend, you should have an idea of whether Savezone I&C's dividend is reliable and sustainable. So we need to investigate whether Savezone I&C can afford its dividend, and if the dividend could grow.

View our latest analysis for Savezone I&C

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Savezone I&C is paying out just 9.2% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. What's good is that dividends were well covered by free cash flow, with the company paying out 17% of its cash flow last year.

It's positive to see that Savezone I&C's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Savezone I&C paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Savezone I&C's earnings per share have fallen at approximately 13% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Unfortunately Savezone I&C has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

The Bottom Line

Has Savezone I&C got what it takes to maintain its dividend payments? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. In summary, while it has some positive characteristics, we're not inclined to race out and buy Savezone I&C today.

While it's tempting to invest in Savezone I&C for the dividends alone, you should always be mindful of the risks involved. For example, we've found 4 warning signs for Savezone I&C (1 is significant!) 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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