Samyoung Electronics Co., Ltd (KRX:005680) Goes Ex-Dividend Soon

Samyoung Electronics Co., Ltd (KRX:005680) stock is about to trade ex-dividend in 4 days. You can purchase shares before the 29th of December in order to receive the dividend, which the company will pay on the 17th of April.

Samyoung Electronics's next dividend payment will be ₩250 per share. Last year, in total, the company distributed ₩250 to shareholders. Calculating the last year's worth of payments shows that Samyoung Electronics has a trailing yield of 2.7% on the current share price of ₩9380. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Samyoung 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. Samyoung Electronics paid out a comfortable 45% of its profit last year. 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. It distributed 29% of its free cash flow as dividends, a comfortable payout level for most companies.

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 Samyoung Electronics paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Readers will understand then, why we're concerned to see Samyoung Electronics's earnings per share have dropped 9.8% a year over the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

Given that Samyoung Electronics has only been paying a dividend for a year, there's not much of a past history to draw insight from.

Final Takeaway

Should investors buy Samyoung Electronics for the upcoming dividend? Samyoung Electronics 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. Overall, it's hard to get excited about Samyoung Electronics from a dividend perspective.

So while Samyoung Electronics looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Every company has risks, and we've spotted 1 warning sign for Samyoung Electronics you should know about.

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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