Is It Worth Considering Mivne Real Estate (K.D) Ltd (TLV:MVNE) For Its Upcoming Dividend?
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Mivne Real Estate (K.D) Ltd (TLV:MVNE) is about to trade ex-dividend in the next 3 days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. 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. Meaning, you will need to purchase Mivne Real Estate (K.D)'s shares before the 26th of August to receive the dividend, which will be paid on the 16th of September.
The company's next dividend payment will be ₪0.1036088 per share. Last year, in total, the company distributed ₪0.14 to shareholders. Based on the last year's worth of payments, Mivne Real Estate (K.D) stock has a trailing yield of around 1.1% on the current share price of ₪12.59. 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! 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. Mivne Real Estate (K.D) paid out just 18% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. 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. The good news is it paid out just 17% of its free cash flow in the last year.
It's positive to see that Mivne Real Estate (K.D)'s dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Check out our latest analysis for Mivne Real Estate (K.D)
Click here to see how much of its profit Mivne Real Estate (K.D) paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're not enthused to see that Mivne Real Estate (K.D)'s earnings per share have remained effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Mivne Real Estate (K.D)'s dividend payments are broadly unchanged compared to where they were six years ago.
The Bottom Line
From a dividend perspective, should investors buy or avoid Mivne Real Estate (K.D)? Earnings per share have been flat, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend gets cut. Overall, it's hard to get excited about Mivne Real Estate (K.D) from a dividend perspective.
So while Mivne Real Estate (K.D) looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, Mivne Real Estate (K.D) has 3 warning signs (and 2 which are a bit concerning) we think you should know about.
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.