SEOWONINTECH.Co.,Ltd (KOSDAQ:093920) Pays A ₩300 Dividend In Just Three Days

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that SEOWONINTECH.Co.,Ltd (KOSDAQ:093920) is about to go ex-dividend in just three days. Investors can purchase shares before the 29th of December in order to be eligible for this dividend, which will be paid on the 8th of April.

SEOWONINTECH.Co.Ltd's next dividend payment will be ₩300 per share, and in the last 12 months, the company paid a total of ₩300 per share. Calculating the last year's worth of payments shows that SEOWONINTECH.Co.Ltd has a trailing yield of 4.0% on the current share price of ₩7450. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for SEOWONINTECH.Co.Ltd

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. That's why it's good to see SEOWONINTECH.Co.Ltd paying out a modest 48% of its earnings. A useful secondary check can be to evaluate whether SEOWONINTECH.Co.Ltd generated enough free cash flow to afford its dividend. The good news is it paid out just 21% of its free cash flow in the last year.

It's positive to see that SEOWONINTECH.Co.Ltd'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 SEOWONINTECH.Co.Ltd 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. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're discomforted by SEOWONINTECH.Co.Ltd's 18% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, SEOWONINTECH.Co.Ltd has lifted its dividend by approximately 20% a year on average.

The Bottom Line

Is SEOWONINTECH.Co.Ltd worth buying for its dividend? SEOWONINTECH.Co.Ltd 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. To summarise, SEOWONINTECH.Co.Ltd looks okay on this analysis, although it doesn't appear a stand-out opportunity.

In light of that, while SEOWONINTECH.Co.Ltd has an appealing dividend, it's worth knowing the risks involved with this stock. Our analysis shows 1 warning sign for SEOWONINTECH.Co.Ltd and you should be aware of this before buying any shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising 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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