Samji Electronics Co., Ltd. (KOSDAQ:037460) Stock Goes Ex-Dividend In Just Three Days

Samji Electronics Co., Ltd. (KOSDAQ:037460) stock is about to trade ex-dividend in 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 10th of April.

Samji Electronics's upcoming dividend is ₩140 a share, following on from the last 12 months, when the company distributed a total of ₩140 per share to shareholders. Based on the last year's worth of payments, Samji Electronics has a trailing yield of 1.2% on the current stock price of ₩11900. If you buy this business for its dividend, you should have an idea of whether Samji Electronics's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Samji Electronics

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. Samji Electronics paid out just 9.7% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Fortunately, it paid out only 28% of its free cash flow in the past 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 how much of its profit Samji Electronics paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. 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 explains why we're not overly excited about Samji Electronics's flat earnings over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Samji Electronics's dividend payments per share have declined at 0.7% per year on average over the past 10 years, which is uninspiring.

The Bottom Line

Is Samji Electronics an attractive dividend stock, or better left on the shelf? While it's not great to see that earnings per share are effectively flat over the 10-year period we checked, at least the payout ratios are low and conservative. Overall, it's hard to get excited about Samji Electronics from a dividend perspective.

In light of that, while Samji Electronics has an appealing dividend, it's worth knowing the risks involved with this stock. For example - Samji Electronics has 1 warning sign 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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