Bank Leumi le-Israel B.M. (TLV:LUMI) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

It looks like Bank Leumi le-Israel B.M. (TLV:LUMI) is about to go ex-dividend in the next four days. The ex-dividend date is usually set to be one business day 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. In other words, investors can purchase Bank Leumi le-Israel B.M's shares before the 26th of August in order to be eligible for the dividend, which will be paid on the 5th of September.

The company's upcoming dividend is ₪0.4496258 a share, following on from the last 12 months, when the company distributed a total of ₪1.14 per share to shareholders. Last year's total dividend payments show that Bank Leumi le-Israel B.M has a trailing yield of 3.3% on the current share price of ₪34.37. If you buy this business for its dividend, you should have an idea of whether Bank Leumi le-Israel B.M's dividend is reliable and sustainable. So we need to investigate whether Bank Leumi le-Israel B.M can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Bank Leumi le-Israel B.M

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. Bank Leumi le-Israel B.M paid out a comfortable 26% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

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. 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 Bank Leumi le-Israel B.M has grown its earnings rapidly, up 22% 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. In the past seven years, Bank Leumi le-Israel B.M has increased its dividend at 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 Bank Leumi le-Israel B.M got what it takes to maintain its dividend payments? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. In summary, Bank Leumi le-Israel B.M appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

While it's tempting to invest in Bank Leumi le-Israel B.M for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 2 warning signs for Bank Leumi le-Israel B.M that you should be aware of before investing in their shares.

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.