It looks like Nara Mold & Die Co., Ltd. (KOSDAQ:051490) is about to go ex-dividend in the next 3 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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. Therefore, if you purchase Nara Mold & Die's shares on or after the 27th of December, you won't be eligible to receive the dividend, when it is paid on the 14th of April.
The company's upcoming dividend is ₩70.00 a share, following on from the last 12 months, when the company distributed a total of ₩70.00 per share to shareholders. Based on the last year's worth of payments, Nara Mold & Die has a trailing yield of 1.9% on the current stock price of ₩3710.00. If you buy this business for its dividend, you should have an idea of whether Nara Mold & Die's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing. Pelletising Machine
See our latest analysis for Nara Mold & Die
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Nara Mold & Die paid out a comfortable 44% 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 15% of its free cash flow in the last year.
It's positive to see that Nara Mold & Die'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 Nara Mold & Die paid out over the last 12 months.
When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're discomforted by Nara Mold & Die's 9.4% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Nara Mold & Die's dividend payments are effectively flat on where they were five years ago. When earnings are declining yet the dividends are flat, typically the company is either paying out a higher portion of its earnings, or paying out of cash or debt on the balance sheet, neither of which is ideal.
Should investors buy Nara Mold & Die for the upcoming dividend? Nara Mold & Die 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. Overall, it's hard to get excited about Nara Mold & Die from a dividend perspective.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 4 warning signs for Nara Mold & Die and you should be aware of these before buying any shares.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
Discover if Nara Mold & Die might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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Engages in the manufacture and sale of press dies, plastic molds, stamped parts, and assembly parts in South Korea.
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