Keystone Infra Ltd (TLV:KSTN) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Keystone Infra Ltd (TLV:KSTN) is about to go ex-dividend in just 3 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. In other words, investors can purchase Keystone Infra's shares before the 16th of October in order to be eligible for the dividend, which will be paid on the 26th of October.
The company's next dividend payment will be ₪0.1160858 per share. Last year, in total, the company distributed ₪0.43 to shareholders. Based on the last year's worth of payments, Keystone Infra has a trailing yield of 2.3% on the current stock price of ₪18.31. If you buy this business for its dividend, you should have an idea of whether Keystone Infra's dividend is reliable and sustainable. So we need to investigate whether Keystone Infra can afford its dividend, and if the dividend could grow.
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. Keystone Infra paid out just 16% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Check out our latest analysis for Keystone Infra
Click here to see how much of its profit Keystone Infra paid out over the last 12 months.
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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Keystone Infra has grown its earnings rapidly, up 41% a year for the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. It looks like the Keystone Infra dividends are largely the same as they were five years ago.
To Sum It Up
Is Keystone Infra an attractive dividend stock, or better left on the shelf? Companies like Keystone Infra that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. We think this is a pretty attractive combination, and would be interested in investigating Keystone Infra more closely.
In light of that, while Keystone Infra has an appealing dividend, it's worth knowing the risks involved with this stock. For example, we've found 1 warning sign for Keystone Infra that we recommend you consider before investing in the business.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.