Rami Levi Chain Stores Hashikma Marketing 2006 Ltd (TLV:RMLI) Pays A ₪5.0814546 Dividend In Just Three Days

Rami Levi Chain Stores Hashikma Marketing 2006 Ltd (TLV:RMLI) stock is about to trade ex-dividend in three days. The ex-dividend date occurs one day 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 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. In other words, investors can purchase Rami Levi Chain Stores Hashikma Marketing 2006's shares before the 9th of June in order to be eligible for the dividend, which will be paid on the 19th of June.

The company's next dividend payment will be ₪5.0814546 per share. Last year, in total, the company distributed ₪15.03 to shareholders. Calculating the last year's worth of payments shows that Rami Levi Chain Stores Hashikma Marketing 2006 has a trailing yield of 7.3% on the current share price of ₪206.50. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

Check out our latest analysis for Rami Levi Chain Stores Hashikma Marketing 2006

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. Last year Rami Levi Chain Stores Hashikma Marketing 2006 paid out 104% of its profits as dividends to shareholders, suggesting the dividend is not well covered by earnings. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Fortunately, it paid out only 49% of its free cash flow in the past year.

It's good to see that while Rami Levi Chain Stores Hashikma Marketing 2006's dividends were not covered by profits, at least they are affordable from a cash perspective. Still, if the company repeatedly paid a dividend greater than its profits, we'd be concerned. Extraordinarily few companies are capable of persistently paying a dividend that is greater than their profits.

Click here to see how much of its profit Rami Levi Chain Stores Hashikma Marketing 2006 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. This is why it's a relief to see Rami Levi Chain Stores Hashikma Marketing 2006 earnings per share are up 7.9% per annum over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, Rami Levi Chain Stores Hashikma Marketing 2006 has lifted its dividend by approximately 11% 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 Rami Levi Chain Stores Hashikma Marketing 2006 an attractive dividend stock, or better left on the shelf? Earnings per share have grown modestly, and last year Rami Levi Chain Stores Hashikma Marketing 2006 paid out a low percentage of its cash flow. However, its dividend payments were not well covered by profits. In summary, it's hard to get excited about Rami Levi Chain Stores Hashikma Marketing 2006 from a dividend perspective.

If you want to look further into Rami Levi Chain Stores Hashikma Marketing 2006, it's worth knowing the risks this business faces. For example - Rami Levi Chain Stores Hashikma Marketing 2006 has 1 warning sign we think you should be aware of.

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.