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Why It Might Not Make Sense To Buy Union Corporation (KRX:000910) For Its Upcoming Dividend

Simply Wall St · 1d ago

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 Union Corporation (KRX:000910) is about to go ex-dividend in just four days. The ex-dividend date is commonly two business days 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. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. This means that investors who purchase Union's shares on or after the 29th of December will not receive the dividend, which will be paid on the 16th of April.

The company's next dividend payment will be ₩125.00 per share, on the back of last year when the company paid a total of ₩125 to shareholders. Based on the last year's worth of payments, Union has a trailing yield of 2.9% on the current stock price of ₩4255.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Union has been able to grow its dividends, or if the dividend might be cut.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Union lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable. Given that the company reported a loss last year, we now need to see if it generated enough free cash flow to fund the dividend. If cash earnings don't cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable. What's good is that dividends were well covered by free cash flow, with the company paying out 21% of its cash flow last year.

See our latest analysis for Union

Click here to see how much of its profit Union paid out over the last 12 months.

historic-dividend
KOSE:A000910 Historic Dividend December 24th 2025

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Union was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last six years, Union has lifted its dividend by approximately 3.8% a year on average.

Remember, you can always get a snapshot of Union's financial health, by checking our visualisation of its financial health, here.

The Bottom Line

Is Union worth buying for its dividend? First, it's not great to see the company paying a dividend despite being loss-making over the last year. On the plus side, the dividend was covered by free cash flow." It's not the most attractive proposition from a dividend perspective, and we'd probably give this one a miss for now.

Having said that, if you're looking at this stock without much concern for the dividend, you should still be familiar of the risks involved with Union. Our analysis shows 4 warning signs for Union that we strongly recommend you have a look at before investing in the company.

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.