Why You Might Be Interested In Bank Leumi le-Israel B.M. (TLV:LUMI) For Its Upcoming Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Bank Leumi le-Israel B.M. (TLV:LUMI) is about to go ex-dividend in just 3 days. 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 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. Therefore, if you purchase Bank Leumi le-Israel B.M's shares on or after the 12th of March, you won't be eligible to receive the dividend, when it is paid on the 20th of March.

The company's next dividend payment will be ₪0.4701152 per share. Last year, in total, the company distributed ₪1.93 to shareholders. Based on the last year's worth of payments, Bank Leumi le-Israel B.M stock has a trailing yield of around 3.8% on the current share price of ₪50.75. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Bank Leumi le-Israel B.M can afford its dividend, and if the dividend could grow.

See 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 30% 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?

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 fall far enough, the company could be forced to cut its dividend. 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. Bank Leumi le-Israel B.M has delivered an average of 25% per year annual increase in its dividend, based on the past eight years of dividend payments. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

The Bottom Line

Has Bank Leumi le-Israel B.M got what it takes to maintain its dividend payments? Companies like Bank Leumi le-Israel B.M that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their 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. We think this is a pretty attractive combination, and would be interested in investigating Bank Leumi le-Israel B.M more closely.

In light of that, while Bank Leumi le-Israel B.M has an appealing dividend, it's worth knowing the risks involved with this stock. For example, we've found 1 warning sign for Bank Leumi le-Israel B.M that we recommend you consider before investing in the business.

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.