Bikurey Hasade Group Ltd (TLV:BKRY) Stock Goes Ex-Dividend In Just Three Days

It looks like Bikurey Hasade Group Ltd (TLV:BKRY) is about to go ex-dividend in the next 3 days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. This means that investors who purchase Bikurey Hasade Group's shares on or after the 27th of August will not receive the dividend, which will be paid on the 3rd of September.

The company's upcoming dividend is ₪0.0467467 a share, following on from the last 12 months, when the company distributed a total of ₪0.18 per share to shareholders. Last year's total dividend payments show that Bikurey Hasade Group has a trailing yield of 4.2% on the current share price of ₪4.294. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

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Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. That's why it's good to see Bikurey Hasade Group paying out a modest 44% of its earnings. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Fortunately, it paid out only 37% 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.

See our latest analysis for Bikurey Hasade Group

Click here to see how much of its profit Bikurey Hasade Group paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Readers will understand then, why we're concerned to see Bikurey Hasade Group's earnings per share have dropped 10% a year over the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past two years, Bikurey Hasade Group has increased its dividend at approximately 39% a year on average.

Final Takeaway

Should investors buy Bikurey Hasade Group for the upcoming dividend? Bikurey Hasade Group 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. In summary, it's hard to get excited about Bikurey Hasade Group from a dividend perspective.

While it's tempting to invest in Bikurey Hasade Group for the dividends alone, you should always be mindful of the risks involved. Case in point: We've spotted 2 warning signs for Bikurey Hasade Group you should be aware of.

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.