Bikurey Hasade Group (TLV:BKRY) Could Be A Buy For Its Upcoming Dividend

Readers hoping to buy Bikurey Hasade Group Ltd (TLV:BKRY) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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 Bikurey Hasade Group's shares before the 4th of December in order to receive the dividend, which the company will pay on the 11th of December.

The company's upcoming dividend is ₪0.0333905 a share, following on from the last 12 months, when the company distributed a total of ₪0.15 per share to shareholders. Calculating the last year's worth of payments shows that Bikurey Hasade Group has a trailing yield of 3.2% on the current share price of ₪4.603. 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 check whether the dividend payments are covered, and if earnings are growing.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

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. Bikurey Hasade Group paid out a comfortable 36% of its profit last year. A useful secondary check can be to evaluate whether Bikurey Hasade Group 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 8.3% of its cash flow last year.

It's positive to see that Bikurey Hasade Group's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

View our latest analysis for Bikurey Hasade Group

Click here to see how much of its profit Bikurey Hasade Group 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at Bikurey Hasade Group, with earnings per share up 8.5% on average over the last five years. Management have been reinvested more than half of the company's earnings within the business, and the company has been able to grow earnings with this retained capital. Organisations that reinvest heavily in themselves typically get stronger over time, which can bring attractive benefits such as stronger earnings and dividends.

Unfortunately Bikurey Hasade Group has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

To Sum It Up

Is Bikurey Hasade Group worth buying for its dividend? Earnings per share have been growing moderately, and Bikurey Hasade Group is paying out less than half its earnings and cash flow as dividends, which is an attractive combination as it suggests the company is investing in growth. We would prefer to see earnings growing faster, but the best dividend stocks over the long term typically combine significant earnings per share growth with a low payout ratio, and Bikurey Hasade Group is halfway there. Bikurey Hasade Group looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example, Bikurey Hasade Group has 2 warning signs (and 1 which can't be ignored) we think you should know about.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.