M.Yochananof and Sons (1988) Ltd (TLV:YHNF) Goes Ex-Dividend Soon

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that M.Yochananof and Sons (1988) Ltd (TLV:YHNF) is about to go ex-dividend in just 3 days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Accordingly, M.Yochananof and Sons (1988) investors that purchase the stock on or after the 28th of August will not receive the dividend, which will be paid on the 9th of September.

The company's next dividend payment will be ₪2.08 per share, on the back of last year when the company paid a total of ₪5.52 to shareholders. Looking at the last 12 months of distributions, M.Yochananof and Sons (1988) has a trailing yield of approximately 1.9% on its current stock price of ₪295.00. 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 M.Yochananof and Sons (1988) can afford its dividend, and if the dividend could grow.

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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 more than half (72%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Thankfully its dividend payments took up just 43% of the free cash flow it generated, which is a comfortable payout ratio.

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.

See 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?

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. Fortunately for readers, M.Yochananof and Sons (1988)'s earnings per share have been growing at 13% a year for the past 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 an average of 3.1% per year annual increase in its dividend, based on the past four years of dividend payments. Earnings per share have been growing much quicker than dividends, potentially because M.Yochananof and Sons (1988) is keeping back more of its profits to grow the business.

The Bottom Line

Should investors buy M.Yochananof and Sons (1988) for the upcoming dividend? M.Yochananof and Sons (1988)'s growing earnings per share and conservative payout ratios make for a decent combination. We also like that it paid out a lower percentage of its cash flow. Overall we think this is an attractive combination and worthy of further research.

Keen to explore more data on M.Yochananof and Sons (1988)'s financial performance? Check out our visualisation of its historical revenue and earnings growth.

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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.