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It Might Not Be A Great Idea To Buy Dohwa Engineering Co., Ltd. (KRX:002150) For Its Next Dividend

Simply Wall St · 2d ago

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Dohwa Engineering Co., Ltd. (KRX:002150) is about to trade ex-dividend in the next 3 days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible 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. In other words, investors can purchase Dohwa Engineering's shares before the 29th of December in order to be eligible for the dividend, which will be paid on the 6th of April.

The company's next dividend payment will be ₩280.00 per share, on the back of last year when the company paid a total of ₩280 to shareholders. Last year's total dividend payments show that Dohwa Engineering has a trailing yield of 4.3% on the current share price of ₩6450.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

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Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Dohwa Engineering reported a loss last year, so it's not great to see that it has continued paying a dividend. 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. It paid out 77% of its free cash flow as dividends, which is within usual limits but will limit the company's ability to lift the dividend if there's no growth.

Check out our latest analysis for Dohwa Engineering

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

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KOSE:A002150 Historic Dividend December 25th 2025

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. Dohwa Engineering 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.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past eight years, Dohwa Engineering has increased its dividend at approximately 5.0% a year on average.

We update our analysis on Dohwa Engineering every 24 hours, so you can always get the latest insights on its financial health, here.

Final Takeaway

From a dividend perspective, should investors buy or avoid Dohwa Engineering? 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." Bottom line: Dohwa Engineering has some unfortunate characteristics that we think could lead to sub-optimal outcomes for dividend investors.

With that being said, if you're still considering Dohwa Engineering as an investment, you'll find it beneficial to know what risks this stock is facing. For example, we've found 2 warning signs for Dohwa Engineering (1 is significant!) that deserve your attention before investing in the shares.

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