Export Investment Co. Ltd. (TLV:EXPO) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Readers hoping to buy Export Investment Co. Ltd. (TLV:EXPO) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date occurs one day 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. Therefore, if you purchase Export Investment's shares on or after the 8th of September, you won't be eligible to receive the dividend, when it is paid on the 22nd of September.

The company's next dividend payment will be ₪0.4871325 per share. Last year, in total, the company distributed ₪1.15 to shareholders. Last year's total dividend payments show that Export Investment has a trailing yield of 2.4% on the current share price of ₪48.12. If you buy this business for its dividend, you should have an idea of whether Export Investment's dividend is reliable and sustainable. So we need to investigate whether Export Investment can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Export Investment

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. Export Investment has a low and conservative payout ratio of just 10% of its income after tax.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit Export Investment 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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see Export Investment's earnings per share have risen 12% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last eight years, Export Investment has lifted its dividend by approximately 20% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

Has Export Investment got what it takes to maintain its dividend payments? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, Export Investment appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

Keen to explore more data on Export Investment's financial performance? Check out our visualisation of its historical revenue and earnings growth.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.