Be Sure To Check Out ICD Co., Ltd. (KOSDAQ:040910) Before It Goes Ex-Dividend

It looks like ICD Co., Ltd. (KOSDAQ:040910) is about to go ex-dividend in the next 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 16th of April.

ICD's upcoming dividend is ₩150 a share, following on from the last 12 months, when the company distributed a total of ₩150 per share to shareholders. Based on the last year's worth of payments, ICD has a trailing yield of 0.9% on the current stock price of ₩17250. If you buy this business for its dividend, you should have an idea of whether ICD's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for ICD

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. ICD has a low and conservative payout ratio of just 5.4% of its income after tax. 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 15% of its cash flow last year.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see ICD's earnings have been skyrocketing, up 53% per annum for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, ICD looks like a promising growth company.

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

The Bottom Line

Has ICD got what it takes to maintain its dividend payments? ICD has been growing earnings at a rapid rate, and has a conservatively low payout ratio, implying that it is reinvesting heavily in its business; a sterling combination. It's a promising combination that should mark this company worthy of closer attention.

In light of that, while ICD has an appealing dividend, it's worth knowing the risks involved with this stock. For example - ICD has 2 warning signs we think you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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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