Danel (Adir Yeoshua) Ltd (TLV:DANE) Passed Our Checks, And It's About To Pay A ₪5.00 Dividend

By
Simply Wall St
Published
November 23, 2021
TASE:DANE
Source: Shutterstock

Danel (Adir Yeoshua) Ltd (TLV:DANE) is about to trade ex-dividend in the next three 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 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. Meaning, you will need to purchase Danel (Adir Yeoshua)'s shares before the 28th of November to receive the dividend, which will be paid on the 13th of December.

The company's upcoming dividend is ₪5.00 a share, following on from the last 12 months, when the company distributed a total of ₪20.00 per share to shareholders. Last year's total dividend payments show that Danel (Adir Yeoshua) has a trailing yield of 2.8% on the current share price of ₪719.9. If you buy this business for its dividend, you should have an idea of whether Danel (Adir Yeoshua)'s dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Danel (Adir Yeoshua)

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It paid out 83% of its free cash flow as dividends, which is within usual limits but will limit the company's ability to lift the dividend if there's no growth.

Click here to see how much of its profit Danel (Adir Yeoshua) paid out over the last 12 months.

historic-dividend
TASE:DANE Historic Dividend November 24th 2021

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. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see Danel (Adir Yeoshua)'s earnings per share have risen 18% per annum over the last five years. It paid out more than three-quarters of its earnings in the last year, even though earnings per share are growing rapidly. We're surprised that management has not elected to reinvest more in the business to accelerate growth further.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Danel (Adir Yeoshua) has increased its dividend at approximately 17% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

From a dividend perspective, should investors buy or avoid Danel (Adir Yeoshua)? From a dividend perspective, we're encouraged to see that earnings per share have been growing, the company is paying out less than half of its earnings, and a bit over half its free cash flow. Danel (Adir Yeoshua) looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

In light of that, while Danel (Adir Yeoshua) has an appealing dividend, it's worth knowing the risks involved with this stock. In terms of investment risks, we've identified 1 warning sign with Danel (Adir Yeoshua) and understanding them should be part of your investment process.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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.

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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.