First International Bank of Israel Ltd (TLV:FIBI) stock is about to trade ex-dividend in three 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. 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. Meaning, you will need to purchase First International Bank of Israel's shares before the 19th of August to receive the dividend, which will be paid on the 27th of August.
The company's next dividend payment will be ₪5.563464 per share, on the back of last year when the company paid a total of ₪11.91 to shareholders. Looking at the last 12 months of distributions, First International Bank of Israel has a trailing yield of approximately 4.9% on its current stock price of ₪242.30. If you buy this business for its dividend, you should have an idea of whether First International Bank of Israel's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. First International Bank of Israel is paying out an acceptable 70% 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.
See our latest analysis for First International Bank of Israel
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. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see First International Bank of Israel has grown its earnings rapidly, up 24% a year for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. First International Bank of Israel has delivered an average of 25% per year annual increase in its dividend, based on the past 10 years of dividend payments. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
The Bottom Line
Is First International Bank of Israel worth buying for its dividend? Earnings per share are growing at an attractive rate, and First International Bank of Israel is paying out a bit over half its profits. First International Bank of Israel ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example - First International Bank of Israel has 1 warning sign we think you should be aware of.
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.