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Karin Technology Holdings Limited (SGX:K29) is about to trade ex-dividend in the next 3 days. You will need to purchase shares before the 31st of October to receive the dividend, which will be paid on the 21st of November.
Karin Technology Holdings's upcoming dividend is S$0.08 a share, following on from the last 12 months, when the company distributed a total of S$0.1 per share to shareholders. Last year's total dividend payments show that Karin Technology Holdings has a trailing yield of 7.3% on the current share price of SGD0.325. 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! As a result, readers should always check whether Karin Technology Holdings has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Karin Technology Holdings
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Karin Technology Holdings paid out 90% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It paid out more than half (53%) of its free cash flow in the past year, which is within an average range for most companies.
It's good to see that while Karin Technology Holdings'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.
Click here to see how much of its profit Karin Technology Holdings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. So we're not too excited that Karin Technology Holdings's earnings are down 3.1% a year over the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. It looks like the Karin Technology Holdings dividends are largely the same as they were ten years ago. If a company's dividend stays flat while earnings are in decline, this is typically a sign that it is paying out a larger percentage of its earnings. This can become unsustainable if earnings fall far enough.