Posco ICT Company Ltd. (KOSDAQ:022100) Pays A ₩50.00 Dividend In Just Three Days

Posco ICT Company Ltd. (KOSDAQ:022100) is about to trade ex-dividend in the next three days. If you purchase the stock on or after the 29th of December, you won't be eligible to receive this dividend, when it is paid on the 29th of April.

Posco ICT's next dividend payment will be ₩50.00 per share, and in the last 12 months, the company paid a total of ₩50.00 per share. Calculating the last year's worth of payments shows that Posco ICT has a trailing yield of 0.7% on the current share price of ₩7200. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for Posco ICT

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. Posco ICT paid out just 21% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether Posco ICT generated enough free cash flow to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 16% 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 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. So we're not too excited that Posco ICT's earnings are down 2.5% a year over the past five years.

Unfortunately Posco ICT 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

Is Posco ICT an attractive dividend stock, or better left on the shelf? Posco ICT 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. In summary, while it has some positive characteristics, we're not inclined to race out and buy Posco ICT today.

Wondering what the future holds for Posco ICT? See what the four analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

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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