Four Days Left Until Hiron-Trade Investments & Industrial Buildings Ltd (TLV:HRON) Trades Ex-Dividend
Hiron-Trade Investments & Industrial Buildings Ltd (TLV:HRON) is about to trade ex-dividend in the next 4 days. The ex-dividend date generally occurs two days 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 because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. In other words, investors can purchase Hiron-Trade Investments & Industrial Buildings' shares before the 18th of December in order to be eligible for the dividend, which will be paid on the 11th of January.
The company's next dividend payment will be ₪25.00 per share. Last year, in total, the company distributed ₪50.00 to shareholders. Calculating the last year's worth of payments shows that Hiron-Trade Investments & Industrial Buildings has a trailing yield of 2.0% on the current share price of ₪2511.00. If you buy this business for its dividend, you should have an idea of whether Hiron-Trade Investments & Industrial Buildings's dividend is reliable and sustainable. So we need to investigate whether Hiron-Trade Investments & Industrial Buildings can afford its dividend, and if the dividend could grow.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Hiron-Trade Investments & Industrial Buildings is paying out just 23% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Fortunately, it paid out only 31% of its free cash flow in the past year.
It's positive to see that Hiron-Trade Investments & Industrial Buildings's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
See our latest analysis for Hiron-Trade Investments & Industrial Buildings
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's not ideal to see Hiron-Trade Investments & Industrial Buildings's earnings per share have been shrinking at 2.2% a year over the previous five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Hiron-Trade Investments & Industrial Buildings has delivered 17% dividend growth per year on average over the past 10 years.
Final Takeaway
Should investors buy Hiron-Trade Investments & Industrial Buildings for the upcoming dividend? Hiron-Trade Investments & Industrial Buildings has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. Overall, it's hard to get excited about Hiron-Trade Investments & Industrial Buildings from a dividend perspective.
So while Hiron-Trade Investments & Industrial Buildings looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To help with this, we've discovered 2 warning signs for Hiron-Trade Investments & Industrial Buildings (1 is significant!) that you ought to be aware of before buying the shares.
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.
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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.