POINT ENGINEERING Co.,Ltd. (KOSDAQ:256630) Pays A ₩40.00 Dividend In Just Three Days

POINT ENGINEERING Co.,Ltd. (KOSDAQ:256630) is about to trade ex-dividend in the next three days. You will need to purchase shares before the 29th of December to receive the dividend, which will be paid on the 7th of April.

The upcoming dividend for POINT ENGINEERINGLtd is ₩40.00 per share, increased from last year's total dividends per share of ₩20.00. If you buy this business for its dividend, you should have an idea of whether POINT ENGINEERINGLtd'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 POINT ENGINEERINGLtd

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. POINT ENGINEERINGLtd has a low and conservative payout ratio of just 17% of its income after tax. A useful secondary check can be to evaluate whether POINT ENGINEERINGLtd generated enough free cash flow to afford its dividend. It paid out 13% of its free cash flow as dividends last year, which is conservatively low.

It's positive to see that POINT ENGINEERINGLtd'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 POINT ENGINEERINGLtd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. From this viewpoint, it's unfortunate that earnings per share have declined 13% over the last year.

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

To Sum It Up

From a dividend perspective, should investors buy or avoid POINT ENGINEERINGLtd? POINT ENGINEERINGLtd has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. All things considered, we are not particularly enthused about POINT ENGINEERINGLtd from a dividend perspective.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Every company has risks, and we've spotted 3 warning signs for POINT ENGINEERINGLtd you should know about.

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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