Kingdom Holding Company (TADAWUL:4280) Will Pay A ر.س0.07 Dividend In Three Days
Kingdom Holding Company (TADAWUL:4280) is about to trade ex-dividend in the next 3 days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase Kingdom Holding's shares on or after the 4th of October will not receive the dividend, which will be paid on the 15th of October.
The company's next dividend payment will be ر.س0.07 per share, on the back of last year when the company paid a total of ر.س0.28 to shareholders. Calculating the last year's worth of payments shows that Kingdom Holding has a trailing yield of 2.1% on the current share price of ر.س13.49. If you buy this business for its dividend, you should have an idea of whether Kingdom Holding's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Kingdom Holding paid out a comfortable 27% of its profit last year.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
View our latest analysis for Kingdom Holding
Click here to see how much of its profit Kingdom Holding paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Readers will understand then, why we're concerned to see Kingdom Holding's earnings per share have dropped 18% a year over the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Kingdom Holding's dividend payments per share have declined at 9.2% per year on average over the past six years, which is uninspiring. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.
The Bottom Line
From a dividend perspective, should investors buy or avoid Kingdom Holding? Kingdom Holding's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.
However if you're still interested in Kingdom Holding as a potential investment, you should definitely consider some of the risks involved with Kingdom Holding. For example, Kingdom Holding has 2 warning signs (and 1 which is significant) we think you should know about.
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.