K-Ensol Co., Ltd. (KOSDAQ:053080) Stock Goes Ex-Dividend In Just Three Days
Readers hoping to buy K-Ensol Co., Ltd. (KOSDAQ:053080) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled 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, K-Ensol investors that purchase the stock on or after the 29th of December will not receive the dividend, which will be paid on the 14th of April.
The company's next dividend payment will be ₩300.00 per share, and in the last 12 months, the company paid a total of ₩300 per share. Based on the last year's worth of payments, K-Ensol stock has a trailing yield of around 2.6% on the current share price of ₩11330.00. 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 investigate whether K-Ensol can afford its dividend, and if the dividend could grow.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. K-Ensol paid out a comfortable 41% of its profit last year. 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. The good news is it paid out just 10% of its free cash flow in the last year.
It's positive to see that K-Ensol'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.
Check out our latest analysis for K-Ensol
Click here to see how much of its profit K-Ensol paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Readers will understand then, why we're concerned to see K-Ensol's earnings per share have dropped 9.4% a year over the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. K-Ensol has seen its dividend decline 0.7% per annum on average over the past five years, which is not great to see.
The Bottom Line
From a dividend perspective, should investors buy or avoid K-Ensol? K-Ensol 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. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're not all that optimistic on its dividend prospects.
In light of that, while K-Ensol has an appealing dividend, it's worth knowing the risks involved with this stock. Case in point: We've spotted 1 warning sign for K-Ensol you should be aware of.
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.