Here's What We Like About Altshuler Shaham Finance's (TLV:ALTF) Upcoming Dividend

Altshuler Shaham Finance Ltd (TLV:ALTF) stock is about to trade ex-dividend in three days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order 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 Altshuler Shaham Finance's shares before the 3rd of September to receive the dividend, which will be paid on the 11th of September.

The company's next dividend payment will be ₪0.116121 per share, on the back of last year when the company paid a total of ₪0.43 to shareholders. Looking at the last 12 months of distributions, Altshuler Shaham Finance has a trailing yield of approximately 6.5% on its current stock price of ₪6.63. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Altshuler Shaham Finance has been able to grow its dividends, or if the dividend might be cut.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Altshuler Shaham Finance paying out a modest 38% of its earnings.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Check out our latest analysis for Altshuler Shaham Finance

Click here to see how much of its profit Altshuler Shaham Finance 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. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're encouraged by the steady growth at Altshuler Shaham Finance, with earnings per share up 3.8% on average over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Altshuler Shaham Finance's dividend payments per share have declined at 25% per year on average over the past three years, which is uninspiring. Altshuler Shaham Finance is a rare case where dividends have been decreasing at the same time as earnings per share have been improving. It's unusual to see, and could point to unstable conditions in the core business, or more rarely an intensified focus on reinvesting profits.

The Bottom Line

Has Altshuler Shaham Finance got what it takes to maintain its dividend payments? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. In summary, Altshuler Shaham Finance appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

On that note, you'll want to research what risks Altshuler Shaham Finance is facing. For instance, we've identified 3 warning signs for Altshuler Shaham Finance (1 is significant) you should be aware of.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.