Hanatour Service Inc. (KRX:039130) Will Pay A ₩1200.00 Dividend In Four Days
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Hanatour Service Inc. (KRX:039130) is about to go ex-dividend in just 4 days. The ex-dividend date generally occurs two days 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, Hanatour Service investors that purchase the stock on or after the 2nd of January will not receive the dividend, which will be paid on the 1st of January.
The company's next dividend payment will be ₩1200.00 per share, on the back of last year when the company paid a total of ₩1,200 to shareholders. Based on the last year's worth of payments, Hanatour Service stock has a trailing yield of around 2.4% on the current share price of ₩49150.00. 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 Hanatour Service 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. Hanatour Service paid out 95% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances. A useful secondary check can be to evaluate whether Hanatour Service generated enough free cash flow to afford its dividend. Fortunately, it paid out only 33% of its free cash flow in the past year.
It's good to see that while Hanatour Service's dividends were not well covered by profits, at least they are affordable from a cash perspective. Still, if the company continues paying out such a high percentage of its profits, the dividend could be at risk if business turns sour.
See our latest analysis for Hanatour Service
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. 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 Hanatour Service has grown its earnings rapidly, up 65% a year for the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Hanatour Service has seen its dividend decline 0.8% per annum on average over the past 10 years, which is not great to see.
To Sum It Up
Is Hanatour Service an attractive dividend stock, or better left on the shelf? Earnings per share have been rising nicely although, even though its cashflow payout ratio is low, we question why Hanatour Service is paying out so much of its profit. In summary, while it has some positive characteristics, we're not inclined to race out and buy Hanatour Service today.
While it's tempting to invest in Hanatour Service for the dividends alone, you should always be mindful of the risks involved. Every company has risks, and we've spotted 1 warning sign for Hanatour Service you should know about.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.