There's A Lot To Like About Tiv Taam Holdings 1's (TLV:TTAM) Upcoming ₪0.039 Dividend

Tiv Taam Holdings 1 Ltd. (TLV:TTAM) stock is about to trade ex-dividend in 2 days. You will need to purchase shares before the 2nd of December to receive the dividend, which will be paid on the 10th of December.

Tiv Taam Holdings 1's next dividend payment will be ₪0.039 per share. Last year, in total, the company distributed ₪0.084 to shareholders. Based on the last year's worth of payments, Tiv Taam Holdings 1 has a trailing yield of 2.6% on the current stock price of ₪6.94. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Tiv Taam Holdings 1 can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Tiv Taam Holdings 1

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Tiv Taam Holdings 1's payout ratio is modest, at just 32% of profit. A useful secondary check can be to evaluate whether Tiv Taam Holdings 1 generated enough free cash flow to afford its dividend. Luckily it paid out just 4.0% of its free cash flow last 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 Tiv Taam Holdings 1 paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Tiv Taam Holdings 1's earnings per share have been growing at 13% a year for the past five years. The company has managed to grow earnings at a rapid rate, while reinvesting most of the profits within the business. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Tiv Taam Holdings 1 has delivered 44% dividend growth per year on average over the past six years. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

Is Tiv Taam Holdings 1 an attractive dividend stock, or better left on the shelf? Tiv Taam Holdings 1 has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past six years, but the conservative payout ratio makes the current dividend look sustainable. Tiv Taam Holdings 1 looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

On that note, you'll want to research what risks Tiv Taam Holdings 1 is facing. We've identified 3 warning signs with Tiv Taam Holdings 1 (at least 1 which can't be ignored), 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.

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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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