DAEDUCK ELECTRONICS (KRX:353200) Will Pay A Larger Dividend Than Last Year At ₩400.00

DAEDUCK ELECTRONICS Co., Ltd. (KRX:353200) has announced that it will be increasing its periodic dividend on the 1st of January to ₩400.00, which will be 33% higher than last year's comparable payment amount of ₩300.00. This will take the dividend yield to an attractive 1.5%, providing a nice boost to shareholder returns.

See our latest analysis for DAEDUCK ELECTRONICS

DAEDUCK ELECTRONICS' Payment Could Potentially Have Solid Earnings Coverage

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. The last dividend was quite easily covered by DAEDUCK ELECTRONICS' earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Looking forward, earnings per share is forecast to rise exponentially over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 17%, so there isn't too much pressure on the dividend.

DAEDUCK ELECTRONICS' Dividend Has Lacked Consistency

Even in its short history, we have seen the dividend cut. The most recent annual payment of ₩300.00 is about the same as the annual payment 3 years ago. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.

DAEDUCK ELECTRONICS Could Grow Its Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. We are encouraged to see that DAEDUCK ELECTRONICS has grown earnings per share at 6.7% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

In Summary

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 3 warning signs for DAEDUCK ELECTRONICS that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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