Is It Worth Considering Altshuler Shaham Finance Ltd (TLV:ALTF) For Its Upcoming Dividend?

Altshuler Shaham Finance Ltd (TLV:ALTF) stock is about to trade ex-dividend in three days. The ex-dividend date occurs one day 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 as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Altshuler Shaham Finance's shares on or after the 3rd of December, you won't be eligible to receive the dividend, when it is paid on the 11th of December.

The company's next dividend payment will be ₪0.14 per share, and in the last 12 months, the company paid a total of ₪0.59 per share. Last year's total dividend payments show that Altshuler Shaham Finance has a trailing yield of 8.4% on the current share price of ₪5.555. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Altshuler Shaham Finance

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Altshuler Shaham Finance paid out more than half (75%) of its earnings last year, which is a regular payout ratio for most companies.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

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?

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. With that in mind, it's good to see earnings have grown 2.8% on last year.

One year is a very short time frame in the pantheon of investing, so we wouldn't get too hung up on these numbers.

We'd also point out that Altshuler Shaham Finance issued a meaningful number of new shares in the past year. It's hard to grow dividends per share when a company keeps creating new shares.

Unfortunately Altshuler Shaham Finance has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

To Sum It Up

From a dividend perspective, should investors buy or avoid Altshuler Shaham Finance? Earnings per share have been growing at a reasonable rate, and the company is paying out a bit over half its earnings as dividends. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

If you want to look further into Altshuler Shaham Finance, it's worth knowing the risks this business faces. To that end, you should learn about the 2 warning signs we've spotted with Altshuler Shaham Finance (including 1 which makes us a bit uncomfortable).

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.