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Is It Worth Considering Delek Group Ltd. (TLV:DLEKG) For Its Upcoming Dividend?

Simply Wall St · 08/24 07:17

Readers hoping to buy Delek Group Ltd. (TLV:DLEKG) 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. Meaning, you will need to purchase Delek Group's shares before the 28th of August to receive the dividend, which will be paid on the 10th of September.

The company's upcoming dividend is ₪13.670059 a share, following on from the last 12 months, when the company distributed a total of ₪51.46 per share to shareholders. Based on the last year's worth of payments, Delek Group stock has a trailing yield of around 7.0% on the current share price of ₪737.80. 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 Delek Group can afford its dividend, and if the dividend could grow.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Delek Group paid out 92% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It distributed 32% of its free cash flow as dividends, a comfortable payout level for most companies.

It's good to see that while Delek Group's dividends were not well covered by profits, at least they are affordable from a cash perspective. Still, if this were to happen repeatedly, we'd be concerned about whether the dividend is sustainable in a downturn.

View our latest analysis for Delek Group

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

historic-dividend
TASE:DLEKG Historic Dividend August 24th 2025

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Delek Group 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. Delek Group's dividend payments are effectively flat on where they were 10 years ago.

To Sum It Up

From a dividend perspective, should investors buy or avoid Delek Group? Earnings per share have been rising nicely although, even though its cashflow payout ratio is low, we question why Delek Group is paying out so much of its profit. Overall we're not hugely bearish on the stock, but there are likely better dividend investments out there.

On that note, you'll want to research what risks Delek Group is facing. For example - Delek Group has 2 warning signs we think you should be aware of.

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.