Kingdom Holding (TADAWUL:4280) Could Be A Buy For Its Upcoming Dividend

Simply Wall St · 06/10 09:57

Kingdom Holding Company (TADAWUL:4280) stock is about to trade ex-dividend in four days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. 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 15th of June 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. Last year's total dividend payments show that Kingdom Holding has a trailing yield of 3.2% on the current share price of ر.س8.62. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Kingdom Holding can afford its dividend, and if the dividend could grow.

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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 paid out more than half (70%) of its earnings last year, which is a regular payout ratio for most companies.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Check out our latest analysis for Kingdom Holding

Click here to see how much of its profit Kingdom Holding paid out over the last 12 months.

historic-dividend
SASE:4280 Historic Dividend June 10th 2025

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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Kingdom Holding's earnings have been skyrocketing, up 30% per annum 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 11% per annum on average over the past five 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.

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Final Takeaway

Is Kingdom Holding worth buying for its dividend? Earnings per share are growing at an attractive rate, and Kingdom Holding is paying out a bit over half its profits. Overall, Kingdom Holding looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while Kingdom Holding has an appealing dividend, it's worth knowing the risks involved with this stock. Every company has risks, and we've spotted 1 warning sign for Kingdom Holding you should know about.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.