Pro2000Ltd (KOSDAQ:321260) Will Pay A Dividend Of ₩20.00

The board of Pro2000 Co.,Ltd. (KOSDAQ:321260) has announced that it will pay a dividend on the 30th of April, with investors receiving ₩20.00 per share. This payment means that the dividend yield will be 1.0%, which is around the industry average.

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Pro2000Ltd's Payment Could Potentially Have Solid Earnings Coverage

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. However, Pro2000Ltd's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

EPS is set to fall by 72.1% over the next 12 months if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could reach 87%, which is definitely on the higher side.

See our latest analysis for Pro2000Ltd

Pro2000Ltd Doesn't Have A Long Payment History

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 4 years, which isn't that long in the grand scheme of things. The last annual payment of ₩20.00 was flat on the annual payment from4 years ago. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

The Dividend Has Limited Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. Unfortunately things aren't as good as they seem. Pro2000Ltd's earnings per share has shrunk at 72% a year over the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future.

In Summary

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. We would be a touch cautious of relying on this stock primarily for the dividend income.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 3 warning signs for Pro2000Ltd that investors should know about before committing capital to this stock. Is Pro2000Ltd not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.