Three Days Left Until Rami Levi Chain Stores Hashikma Marketing 2006 Ltd (TLV:RMLI) Trades Ex-Dividend

Rami Levi Chain Stores Hashikma Marketing 2006 Ltd (TLV:RMLI) stock is about to trade ex-dividend in three days. Ex-dividend means that investors that purchase the stock on or after the 8th of December will not receive this dividend, which will be paid on the 16th of December.

Rami Levi Chain Stores Hashikma Marketing 2006's next dividend payment will be ₪2.90 per share. Last year, in total, the company distributed ₪6.22 to shareholders. Calculating the last year's worth of payments shows that Rami Levi Chain Stores Hashikma Marketing 2006 has a trailing yield of 2.8% on the current share price of ₪225.9. 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! As a result, readers should always check whether Rami Levi Chain Stores Hashikma Marketing 2006 has been able to grow its dividends, or if the dividend might be cut.

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

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Rami Levi Chain Stores Hashikma Marketing 2006 is paying out an acceptable 73% of its profit, a common payout level among most companies. 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. What's good is that dividends were well covered by free cash flow, with the company paying out 23% of its cash flow last year.

It's positive to see that Rami Levi Chain Stores Hashikma Marketing 2006'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.

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. 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 Rami Levi Chain Stores Hashikma Marketing 2006, with earnings per share up 4.2% on average over the last five years. Earnings growth has been slim and the company is paying out more than half of its earnings. While there is some room to both increase the payout ratio and reinvest in the business, generally the higher a payout ratio goes, the lower a company's prospects for future growth.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Rami Levi Chain Stores Hashikma Marketing 2006 has increased its dividend at approximately 1.9% a year on average.

The Bottom Line

From a dividend perspective, should investors buy or avoid Rami Levi Chain Stores Hashikma Marketing 2006? While earnings per share growth has been modest, Rami Levi Chain Stores Hashikma Marketing 2006's dividend payouts are around an average level; without a sharp change in earnings we feel that the dividend is likely somewhat sustainable. Pleasingly the company paid out a conservatively low percentage of its free cash flow. In summary, it's hard to get excited about Rami Levi Chain Stores Hashikma Marketing 2006 from a dividend perspective.

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. For example - Rami Levi Chain Stores Hashikma Marketing 2006 has 1 warning sign we think you should be aware of.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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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