KRX Dividend Decisions: Avoid Hyosung Advanced Materials and Consider a Better Option

Dividend-paying stocks are often sought after for their potential to provide a reliable source of income. However, companies like Hyosung Advanced Materials, which have seen declining dividend growth, may pose risks that warrant careful consideration. In South Korea’s dynamic market, where many dividends have seen substantial growth, identifying those that fail to maintain or increase their payouts is critical for investors looking to minimize their exposure to volatile yields.

Top 10 Dividend Stocks in South Korea

Name	Dividend yield	Dividend Rating
Kia (KOSE:A000270)	4.43%	★★★★★★
LOTTE Fine Chemicals (KOSE:A004000)	4.33%	★★★★★☆
NH Investment & Securities (KOSE:A005940)	6.18%	★★★★★☆
Industrial Bank of Korea (KOSE:A024110)	6.91%	★★★★★☆
KT (KOSE:A030200)	5.50%	★★★★★☆
Shinhan Financial Group (KOSE:A055550)	3.93%	★★★★★☆
Kyung Nong (KOSE:A002100)	4.95%	★★★★★☆
HANYANG ENG Ltd (KOSDAQ:A045100)	3.16%	★★★★★☆
Cheil Worldwide (KOSE:A030000)	6.00%	★★★★☆☆
Korean Cast Iron Pipe (KOSE:A000970)	6.12%	★★★★☆☆

Click here to see the full list of 72 stocks in our Top KRX Dividend Stocks screener.

Let’s explore one of the most notable options among the screener results and look at one that falls short of the mark.

The best choice

Hana Financial Group (KOSE:A086790)

Simply Wall St Dividend Rating: ★★★★☆☆

Preview: Hana Financial Group Inc., a leading financial services provider in South Korea, operates through its subsidiaries with a market capitalization of approximately ₩18.79 trillion.

Operations: The company generates revenue primarily through three segments: Banking (₩8.98 billion), Capital (₩1.01 billion) and Credit Cards (₩0.52 billion).

Dividend yield: 9.7%

Hana Financial Group, trading 62.3% below our fair value estimate, offers attractive value in the South Korean dividend stock market. Despite its relatively short 7-year dividend history marked by volatility, the company’s dividends are well covered by earnings with a current payout ratio of 30.5%. Forecasts suggest similar coverage in three years (payout ratio of 28.6%). Notably, Hana’s dividend yield stands at 9.67%, placing it in the top quartile of payers in the Korean market. Recent activities include a cash dividend payment and participation in several investor conferences, highlighting its active engagement with the financial community.

To be reconsidered

Hyosung Advanced Materials (KOSE:A298050)

Simply Wall St Dividend Rating: ★☆☆☆☆☆

Preview: Hyosung Advanced Materials Corporation, with a market capitalization of approximately ₩1.55 trillion, is engaged in the manufacturing and global distribution of industrial yarns, polyester, nylon and carpets.

Operations: Hyosung Advanced Materials’ revenue mainly comes from its industrial materials segment, generating ₩3.14 billion, followed by the textile segment with ₩0.36 billion.

Dividend yield: 1.9%

Hyosung Advanced Materials is showing worrying signs for dividend investors, with a declining dividend in its short two years of existence and a current yield of 1.87%, below the top quartile of the South Korean market (3.58%). The company’s dividends are not well supported, as evidenced by a high payout ratio of 127.9% and a lack of free cash flow. Recent financial results show a slowdown, with net income falling from KRW 33.05 billion to KRW 20.21 billion year-on-year, further straining the sustainability of its dividend.

Key points to remember

• Check out all 72 names in our Top KRX Dividend Stocks screener here.
• Are you a shareholder in one of these companies? Make sure you’re never caught off guard by adding your portfolio to Simply Wall St to receive timely alerts on important stock market developments.
• Take control of your financial future with Simply Wall St, which offers free, in-depth knowledge of international markets to every investor.

Curious about other options?

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to constitute financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. Our goal is to provide you with focused, long-term analysis based on fundamental data. Please note that our analysis may not factor in the latest price-sensitive company announcements or qualitative information. Simply Wall St has no position in any of the stocks mentioned.

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