Korea Airport ServiceLtd (KRX:005430) Has Affirmed Its Dividend Of ₩1000.00

The board of Korea Airport Service Co.,Ltd. (KRX:005430) has announced that it will pay a dividend of ₩1000.00 per share on the 27th of April. This payment means the dividend yield will be 1.7%, which is below the average for the industry.

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Korea Airport ServiceLtd's Projected Earnings Seem Likely To Cover Future Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, prior to this announcement, Korea Airport ServiceLtd was quite comfortably covering its dividend with earnings and it was paying more than 75% of its free cash flow to shareholders. The business is earning enough to make the dividend feasible, but the cash payout ratio of 81% shows that most of the cash is going back to the shareholders, which could constrain growth prospects going forward.

Over the next year, EPS could expand by 70.9% if recent trends continue. If the dividend continues on this path, the payout ratio could be 4.8% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for Korea Airport ServiceLtd

Korea Airport ServiceLtd's Dividend Has Lacked Consistency

Korea Airport ServiceLtd has been paying dividends for a while, but the track record isn't stellar. This suggests that the dividend might not be the most reliable. The most recent annual payment of ₩1000.00 is about the same as the annual payment 6 years ago. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Korea Airport ServiceLtd has seen EPS rising for the last five years, at 71% per annum. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

Our Thoughts On Korea Airport ServiceLtd's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. This company is not in the top tier of income providing stocks.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Korea Airport ServiceLtd 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.