Here's What We Like About Amir Marketing and Investments in Agriculture's (TLV:AMRK) Upcoming Dividend

It looks like Amir Marketing and Investments in Agriculture Ltd (TLV:AMRK) is about to go ex-dividend in the next 2 days. The ex-dividend date generally occurs two days 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. 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 Amir Marketing and Investments in Agriculture's shares before the 7th of April in order to receive the dividend, which the company will pay on the 4th of May.

The company's upcoming dividend is ₪1.20 a share, following on from the last 12 months, when the company distributed a total of ₪1.00 per share to shareholders. Calculating the last year's worth of payments shows that Amir Marketing and Investments in Agriculture has a trailing yield of 3.1% on the current share price of ₪32.69. If you buy this business for its dividend, you should have an idea of whether Amir Marketing and Investments in Agriculture's dividend is reliable and sustainable. As a result, readers should always check whether Amir Marketing and Investments in Agriculture has been able to grow its dividends, or if the dividend might be cut.

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Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. That's why it's good to see Amir Marketing and Investments in Agriculture paying out a modest 32% of its earnings. A useful secondary check can be to evaluate whether Amir Marketing and Investments in Agriculture generated enough free cash flow to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 12% of its cash flow last year.

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.

View our latest analysis for Amir Marketing and Investments in Agriculture

Click here to see how much of its profit Amir Marketing and Investments in Agriculture 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. That's why it's comforting to see Amir Marketing and Investments in Agriculture's earnings have been skyrocketing, up 43% per annum for the past five years. Earnings per share have been growing very quickly, and the company is paying out a relatively low percentage of its profit and cash flow. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Amir Marketing and Investments in Agriculture has lifted its dividend by approximately 6.2% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

Is Amir Marketing and Investments in Agriculture worth buying for its dividend? Amir Marketing and Investments in Agriculture has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past 10 years, but the conservative payout ratio makes the current dividend look sustainable. Overall we think this is an attractive combination and worthy of further research.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Every company has risks, and we've spotted 1 warning sign for Amir Marketing and Investments in Agriculture you should know about.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.