Interested In Amot Investments' (TLV:AMOT) Upcoming ₪0.27 Dividend? You Have Three Days Left
Readers hoping to buy Amot Investments Ltd. (TLV:AMOT) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Thus, you can purchase Amot Investments' shares before the 16th of November in order to receive the dividend, which the company will pay on the 26th of November.
The company's next dividend payment will be ₪0.27 per share, on the back of last year when the company paid a total of ₪1.31 to shareholders. Calculating the last year's worth of payments shows that Amot Investments has a trailing yield of 6.9% on the current share price of ₪19.05. If you buy this business for its dividend, you should have an idea of whether Amot Investments's dividend is reliable and sustainable. As a result, readers should always check whether Amot Investments has been able to grow its dividends, or if the dividend might be cut.
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. Amot Investments paid out 65% of its earnings to investors last year, a normal payout level for most businesses. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Over the last year it paid out 68% of its free cash flow as dividends, within the usual range for most companies.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Check out our latest analysis for Amot Investments
Click here to see how much of its profit Amot 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. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see Amot Investments's earnings per share have risen 18% per annum over the last five years. Amot Investments has an average payout ratio which suggests a balance between growing earnings and rewarding shareholders. Given the quick rate of earnings per share growth and current level of payout, there may be a chance of further dividend increases in the future.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Amot Investments has increased its dividend at approximately 6.8% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
To Sum It Up
Is Amot Investments worth buying for its dividend? It's good to see earnings are growing, since all of the best dividend stocks grow their earnings meaningfully over the long run. That's why we're glad to see Amot Investments's earnings per share growing, although as we saw, the company is paying out more than half of its earnings and cashflow - 65% and 68% respectively. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. We've identified 4 warning signs with Amot Investments (at least 2 which make us uncomfortable), and understanding them should be part of your investment process.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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