KCTC (KRX:009070) Is Due To Pay A Dividend Of ₩75.00

KCTC Co. Ltd's (KRX:009070) investors are due to receive a payment of ₩75.00 per share on 14th of April. This payment means the dividend yield will be 1.5%, which is below the average for the industry.

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KCTC's Projected Earnings Seem Likely To Cover Future Distributions

If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, KCTC was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

If the trend of the last few years continues, EPS will grow by 22.1% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 9.7%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for KCTC

KCTC Is Still Building Its Track Record

KCTC's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The dividend has gone from an annual total of ₩45.00 in 2019 to the most recent total annual payment of ₩75.00. This works out to be a compound annual growth rate (CAGR) of approximately 8.9% a year over that time. KCTC has a nice track record of dividend growth but we would wait until we see a longer track record before getting too confident.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. KCTC has seen EPS rising for the last five years, at 22% per annum. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

We Really Like KCTC's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 2 warning signs for KCTC (1 is a bit unpleasant!) that you should be aware of before investing. 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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