Walsin Technology Corporation (TWSE:2492) Pays A NT$2.154432 Dividend In Just Four Days

Walsin Technology Corporation (TWSE:2492) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase Walsin Technology's shares before the 10th of July to receive the dividend, which will be paid on the 1st of August.

The company's next dividend payment will be NT$2.154432 per share. Last year, in total, the company distributed NT$2.15 to shareholders. Looking at the last 12 months of distributions, Walsin Technology has a trailing yield of approximately 1.8% on its current stock price of NT$121.50. 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! As a result, readers should always check whether Walsin Technology has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Walsin Technology

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Walsin Technology's payout ratio is modest, at just 45% of profit. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Luckily it paid out just 23% of its free cash flow last year.

It's positive to see that Walsin Technology'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 Walsin Technology paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Walsin Technology's earnings per share have plummeted approximately 35% a year over the previous five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Walsin Technology has delivered an average of 20% per year annual increase in its dividend, based on the past nine years of dividend payments.

To Sum It Up

Is Walsin Technology an attractive dividend stock, or better left on the shelf? Walsin Technology has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. In summary, it's hard to get excited about Walsin Technology from a dividend perspective.

In light of that, while Walsin Technology has an appealing dividend, it's worth knowing the risks involved with this stock. Be aware that Walsin Technology is showing 2 warning signs in our investment analysis, and 1 of those is concerning...

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.

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