Dor Alon Energy In Israel (1988) Ltd (TLV:DRAL) Passed Our Checks, And It's About To Pay A ₪6.3184493 Dividend
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Dor Alon Energy In Israel (1988) Ltd (TLV:DRAL) is about to trade ex-dividend in the next 4 days. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Dor Alon Energy In Israel (1988)'s shares before the 24th of September in order to be eligible for the dividend, which will be paid on the 8th of October.
The company's next dividend payment will be ₪6.3184493 per share. Last year, in total, the company distributed ₪6.32 to shareholders. Calculating the last year's worth of payments shows that Dor Alon Energy In Israel (1988) has a trailing yield of 3.7% on the current share price of ₪172.50. 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! We need to see whether the dividend is covered by earnings and if it's growing.
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. 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. Thankfully its dividend payments took up just 27% of the free cash flow it generated, which is a comfortable payout ratio.
View our latest analysis for Dor Alon Energy In Israel (1988)
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Dor Alon Energy In Israel (1988) has grown its earnings rapidly, up 28% a year for the past five years. Dor Alon Energy In Israel (1988) is paying out less than half its earnings and cash flow, while simultaneously growing earnings per share at a rapid clip. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, Dor Alon Energy In Israel (1988) has lifted its dividend by approximately 15% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
Final Takeaway
Has Dor Alon Energy In Israel (1988) got what it takes to maintain its dividend payments? It's great that Dor Alon Energy In Israel (1988) is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. Overall we think this is an attractive combination and worthy of further research.
On that note, you'll want to research what risks Dor Alon Energy In Israel (1988) is facing. To help with this, we've discovered 2 warning signs for Dor Alon Energy In Israel (1988) (1 makes us a bit uncomfortable!) that you ought to be aware of before buying the shares.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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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.