There's A Lot To Like About Rami Levi Chain Stores Hashikma Marketing 2006's (TLV:RMLI) Upcoming ₪3.9925715 Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Rami Levi Chain Stores Hashikma Marketing 2006 Ltd (TLV:RMLI) is about to trade ex-dividend in the next three days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase Rami Levi Chain Stores Hashikma Marketing 2006's shares before the 5th of December to receive the dividend, which will be paid on the 12th of December.

The company's next dividend payment will be ₪3.9925715 per share, and in the last 12 months, the company paid a total of ₪15.03 per share. Based on the last year's worth of payments, Rami Levi Chain Stores Hashikma Marketing 2006 stock has a trailing yield of around 6.2% on the current share price of ₪243.50. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Rami Levi Chain Stores Hashikma Marketing 2006

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Rami Levi Chain Stores Hashikma Marketing 2006's payout ratio is modest, at just 35% of profit. 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 48% of its free cash flow in the past 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.

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?

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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, Rami Levi Chain Stores Hashikma Marketing 2006's earnings per share have been growing at 12% a year for the past five years. Earnings per share are growing rapidly and the company is keeping more than half of its earnings within the business; an attractive combination which could suggest the company is focused on reinvesting to grow earnings further. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Rami Levi Chain Stores Hashikma Marketing 2006 has delivered an average of 11% per year annual increase in its dividend, based on the past 10 years of dividend payments. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

From a dividend perspective, should investors buy or avoid Rami Levi Chain Stores Hashikma Marketing 2006? Rami Levi Chain Stores Hashikma Marketing 2006 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. It's a promising combination that should mark this company worthy of closer attention.

While it's tempting to invest in Rami Levi Chain Stores Hashikma Marketing 2006 for the dividends alone, you should always be mindful of the risks involved. Our analysis shows 1 warning sign for Rami Levi Chain Stores Hashikma Marketing 2006 and you should be aware of it before buying any shares.

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.