Be Sure To Check Out M.Yochananof and Sons (1988) Ltd (TLV:YHNF) Before It Goes Ex-Dividend

M.Yochananof and Sons (1988) Ltd (TLV:YHNF) is about to trade ex-dividend in the next 3 days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled 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. Meaning, you will need to purchase M.Yochananof and Sons (1988)'s shares before the 7th of April to receive the dividend, which will be paid on the 21st of April.

The company's upcoming dividend is ₪3.45 a share, following on from the last 12 months, when the company distributed a total of ₪5.52 per share to shareholders. Based on the last year's worth of payments, M.Yochananof and Sons (1988) stock has a trailing yield of around 2.3% on the current share price of ₪238.50. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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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. M.Yochananof and Sons (1988) paid out 72% of its earnings to investors last year, a normal payout level for most businesses. A useful secondary check can be to evaluate whether M.Yochananof and Sons (1988) generated enough free cash flow to afford its dividend. Thankfully its dividend payments took up just 49% of the free cash flow it generated, which is a comfortable payout ratio.

It's positive to see that M.Yochananof and Sons (1988)'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.

Check out our latest analysis for M.Yochananof and Sons (1988)

Click here to see how much of its profit M.Yochananof and Sons (1988) 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 fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see M.Yochananof and Sons (1988)'s earnings per share have risen 14% per annum over the last five years. M.Yochananof and Sons (1988) is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. Given the quick rate of earnings per share growth and current level of payout, there may be a chance of further dividend increases in the future.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. M.Yochananof and Sons (1988) has delivered 3.1% dividend growth per year on average over the past four years. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.

Final Takeaway

Is M.Yochananof and Sons (1988) an attractive dividend stock, or better left on the shelf? We like M.Yochananof and Sons (1988)'s growing earnings per share and the fact that - while its payout ratio is around average - it paid out a lower percentage of its cash flow. Overall we think this is an attractive combination and worthy of further research.

On that note, you'll want to research what risks M.Yochananof and Sons (1988) is facing. In terms of investment risks, we've identified 1 warning sign with M.Yochananof and Sons (1988) and understanding them should be part of your investment process.

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.