Is It Worth Considering Kaonmedia Co, Ltd. (KOSDAQ:078890) For Its Upcoming Dividend?

It looks like Kaonmedia Co, Ltd. (KOSDAQ:078890) is about to go ex-dividend in the next 3 days. Investors can purchase shares before the 29th of December in order to be eligible for this dividend, which will be paid on the 20th of April.

Kaonmedia Co's upcoming dividend is ₩98.04 a share, following on from the last 12 months, when the company distributed a total of ₩98.04 per share to shareholders. Calculating the last year's worth of payments shows that Kaonmedia Co has a trailing yield of 1.5% on the current share price of ₩6370. If you buy this business for its dividend, you should have an idea of whether Kaonmedia Co's dividend is reliable and sustainable. As a result, readers should always check whether Kaonmedia Co has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Kaonmedia Co

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. Kaonmedia Co has a low and conservative payout ratio of just 21% of its income after tax. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. The good news is it paid out just 5.4% of its free cash flow in the last year.

It's positive to see that Kaonmedia Co'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 Kaonmedia Co paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're discomforted by Kaonmedia Co's 15% per annum decline in earnings in the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

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

Final Takeaway

Is Kaonmedia Co worth buying for its dividend? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're not all that optimistic on its dividend prospects.

In light of that, while Kaonmedia Co has an appealing dividend, it's worth knowing the risks involved with this stock. For example, Kaonmedia Co has 5 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

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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