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華爾街日報Kingdom Holding (TADAWUL:4280) Could Be A Buy For Its Upcoming Dividend
Readers hoping to buy Kingdom Holding Company (TADAWUL:4280) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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 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. Thus, you can purchase Kingdom Holding's shares before the 1st of January in order to receive the dividend, which the company will pay on the 1st of January.
The company's upcoming dividend is ر.س0.07 a share, following on from the last 12 months, when the company distributed a total of ر.س0.28 per share to shareholders. Calculating the last year's worth of payments shows that Kingdom Holding has a trailing yield of 3.5% on the current share price of ر.س7.97. 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! So we need to check whether the dividend payments are covered, and if earnings are 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 is paying out an acceptable 61% of its profit, a common payout level among most companies.
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?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. 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 Kingdom Holding has grown its earnings rapidly, up 34% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Kingdom Holding has seen its dividend decline 9.2% per annum on average over the past six years, which is not great to see. It's unusual to see earnings per share increasing at the same time as dividends per share have been in decline. We'd hope it's because the company is reinvesting heavily in its business, but it could also suggest business is lumpy.
To Sum It Up
Is Kingdom Holding an attractive dividend stock, or better left on the shelf? Kingdom Holding has an acceptable payout ratio and its earnings per share have been improving at a decent rate. We think this is a pretty attractive combination, and would be interested in investigating Kingdom Holding more closely.
In light of that, while Kingdom Holding has an appealing dividend, it's worth knowing the risks involved with this stock. Our analysis shows 3 warning signs for Kingdom Holding that we strongly recommend you have a look at before investing in the company.
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.