Be Sure To Check Out Hansol Logistics Co., Ltd. (KRX:009180) Before It Goes Ex-Dividend

Hansol Logistics Co., Ltd. (KRX:009180) stock is about to trade ex-dividend in four days. Investors can purchase shares before the 29th of December in order to be eligible for this dividend, which will be paid on the 10th of April.

Hansol Logistics's next dividend payment will be ₩40.00 per share, and in the last 12 months, the company paid a total of ₩40.00 per share. Looking at the last 12 months of distributions, Hansol Logistics has a trailing yield of approximately 1.7% on its current stock price of ₩2295. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

Check out our latest analysis for Hansol Logistics

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. Hansol Logistics has a low and conservative payout ratio of just 13% of its income after tax. 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. The good news is it paid out just 2.6% of its free cash flow in the last year.

It's positive to see that Hansol Logistics'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 Hansol Logistics paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Hansol Logistics has grown its earnings rapidly, up 140% a year for the past five years. Hansol Logistics looks like a real growth company, with earnings per share growing at a cracking pace and the company reinvesting most of its profits in the business.

Hansol Logistics also issued more than 5% of its market cap in new stock during the past year, which we feel is likely to hurt its dividend prospects in the long run. It's hard to grow dividends per share when a company keeps creating new shares.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Hansol Logistics has delivered 7.2% dividend growth per year on average over the past 10 years. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Should investors buy Hansol Logistics for the upcoming dividend? Hansol Logistics has been growing earnings at a rapid rate, and has a conservatively low payout ratio, implying that it is reinvesting heavily in its business; a sterling combination. There's a lot to like about Hansol Logistics, and we would prioritise taking a closer look at it.

So while Hansol Logistics looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Case in point: We've spotted 1 warning sign for Hansol Logistics you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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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