Hanjin Heavy Industries & Construction Holdings Co., Ltd. (KRX:003480) Looks Interesting, And It's About To Pay A Dividend

It looks like Hanjin Heavy Industries & Construction Holdings Co., Ltd. (KRX:003480) is about to go ex-dividend in the next 3 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, Hanjin Heavy Industries & Construction Holdings investors that purchase the stock on or after the 27th of December will not receive the dividend, which will be paid on the 18th of April.

The company's next dividend payment will be ₩100.00 per share, and in the last 12 months, the company paid a total of ₩100.00 per share. Looking at the last 12 months of distributions, Hanjin Heavy Industries & Construction Holdings has a trailing yield of approximately 2.8% on its current stock price of ₩3570.00. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Hanjin Heavy Industries & Construction Holdings can afford its dividend, and if the dividend could grow.

View our latest analysis for Hanjin Heavy Industries & Construction Holdings

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. Hanjin Heavy Industries & Construction Holdings is paying out just 9.1% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. 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 paid out 4.7% of its free cash flow as dividends last year, which is conservatively low.

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 Hanjin Heavy Industries & Construction Holdings 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Hanjin Heavy Industries & Construction Holdings has grown its earnings rapidly, up 26% a year for the past five years. Hanjin Heavy Industries & Construction Holdings earnings per share have been sprinting ahead like the Road Runner at a track and field day; scarcely stopping even for a cheeky "beep-beep". We also like that it is reinvesting most of its profits in its business.'

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Hanjin Heavy Industries & Construction Holdings's dividend payments are effectively flat on where they were three years ago.

To Sum It Up

Should investors buy Hanjin Heavy Industries & Construction Holdings for the upcoming dividend? Hanjin Heavy Industries & Construction Holdings 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. Overall we think this is an attractive combination and worthy of further research.

On that note, you'll want to research what risks Hanjin Heavy Industries & Construction Holdings is facing. To help with this, we've discovered 3 warning signs for Hanjin Heavy Industries & Construction Holdings (1 is a bit concerning!) that you ought to be aware of before buying the shares.

A common investing mistake is buying the first interesting stock you see. Here you can find a full 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.