Bank Leumi le-Israel B.M's (TLV:LUMI) Dividend Will Be ₪0.2321

Bank Leumi le-Israel B.M. (TLV:LUMI) will pay a dividend of ₪0.2321 on the 17th of December. This means the dividend yield will be fairly typical at 4.2%.

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

Bank Leumi le-Israel B.M's Dividend Forecasted To Be Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time.

Having paid out dividends for 6 years, Bank Leumi le-Israel B.M has a good history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, Bank Leumi le-Israel B.M's payout ratio sits at 9.2%, an extremely comfortable number that shows that it can pay its dividend.

EPS is set to fall by 5.7% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 35% over the same time period, which is in a pretty comfortable range.

Bank Leumi le-Israel B.M's Dividend Has Lacked Consistency

Looking back, Bank Leumi le-Israel B.M's dividend hasn't been particularly consistent. This suggests that the dividend might not be the most reliable. Since 2017, the dividend has gone from ₪0.327 total annually to ₪1.16. This works out to be a compound annual growth rate (CAGR) of approximately 24% a year over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Bank Leumi le-Israel B.M has seen EPS rising for the last five years, at 18% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Bank Leumi le-Israel B.M's prospects of growing its dividend payments in the future.

Bank Leumi le-Israel B.M Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Bank Leumi le-Israel B.M has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about. If you are a dividend investor, you might also want to look at our curated 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.