It looks like Hiron-Trade Investments & Industrial Buildings Ltd (TLV:HRON) is about to go ex-dividend in the next 3 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company’s books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company’s books on the record date. In other words, investors can purchase Hiron-Trade Investments & Industrial Buildings’ shares before the 13th of December in order to be eligible for the dividend, which will be paid on the 10th of January.
The company’s next dividend payment will be ₪20.00 per share. Last year, in total, the company distributed ₪40.00 to shareholders. Based on the last year’s worth of payments, Hiron-Trade Investments & Industrial Buildings stock has a trailing yield of around 2.2% on the current share price of ₪1824. 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! That’s why we should always check whether the dividend payments appear sustainable, and if the company is growing.
View our latest analysis for Hiron-Trade Investments & Industrial Buildings
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. Hiron-Trade Investments & Industrial Buildings is paying out just 15% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. A useful secondary check can be to evaluate whether Hiron-Trade Investments & Industrial Buildings generated enough free cash flow to afford its dividend. Fortunately, it paid out only 28% of its free cash flow in the past year.
It’s encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don’t drop precipitously.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Hiron-Trade Investments & Industrial Buildings’s earnings per share have been growing at 15% a year for the past five years. Earnings per share have been growing rapidly and the company is retaining a majority of its earnings within the business. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Hiron-Trade Investments & Industrial Buildings has increased its dividend at approximately 15% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
Final Takeaway
Is Hiron-Trade Investments & Industrial Buildings worth buying for its dividend? Hiron-Trade Investments & Industrial Buildings has been growing earnings at a rapid rate, and has a conservatively low payout ratio, implying that it is reinvesting heavily in its business; a sterling combination. There’s a lot to like about Hiron-Trade Investments & Industrial Buildings, and we would prioritise taking a closer look at it.
On that note, you’ll want to research what risks Hiron-Trade Investments & Industrial Buildings is facing. For example, we’ve found 1 warning sign for Hiron-Trade Investments & Industrial Buildings that we recommend you consider before investing in the business.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
