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 Y.D. More Investments Ltd (TLV:MRIN) is about to go ex-dividend in just 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. In other words, investors can purchase Y.D. More Investments' shares before the 31st of August in order to be eligible for the dividend, which will be paid on the 8th of September.
The company's next dividend payment will be ₪0.5475029 per share, and in the last 12 months, the company paid a total of ₪1.72 per share. Looking at the last 12 months of distributions, Y.D. More Investments has a trailing yield of approximately 4.1% on its current stock price of ₪42.25. If you buy this business for its dividend, you should have an idea of whether Y.D. More Investments's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
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. Last year, Y.D. More Investments paid out 106% of its income as dividends, which is above a level that we're comfortable with, especially if the company needs to reinvest in its business.
Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced.
See our latest analysis for Y.D. More Investments
Click here to see how much of its profit Y.D. More Investments 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 Y.D. More Investments has grown its earnings rapidly, up 53% 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. Since the start of our data, nine years ago, Y.D. More Investments has lifted its dividend by approximately 16% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.
Final Takeaway
Is Y.D. More Investments worth buying for its dividend? We're not enthused to see Y.D. More Investments's dividend was not well covered by earnings over the last year, although it is great to see earnings growing. We think there are likely better opportunities out there.
If you're not too concerned about Y.D. More Investments's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. To help with this, we've discovered 2 warning signs for Y.D. More Investments (1 is significant!) that you ought to be aware of before buying the shares.
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.