There's A Lot To Like About Atreyu Capital Markets' (TLV:ATRY) Upcoming ₪2.28 Dividend

By
Simply Wall St
Published
September 05, 2021
TASE:ATRY
Source: Shutterstock

Atreyu Capital Markets Ltd (TLV:ATRY) is about to trade ex-dividend in the next 2 days. The ex-dividend date is one business day before a company's record date, 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. This means that investors who purchase Atreyu Capital Markets' shares on or after the 9th of September will not receive the dividend, which will be paid on the 30th of September.

The company's next dividend payment will be ₪2.28 per share, on the back of last year when the company paid a total of ₪4.06 to shareholders. Calculating the last year's worth of payments shows that Atreyu Capital Markets has a trailing yield of 7.3% on the current share price of ₪55.89. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for Atreyu Capital Markets

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. Its dividend payout ratio is 78% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We'd be worried about the risk of a drop in earnings.

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 Atreyu Capital Markets paid out over the last 12 months.

historic-dividend
TASE:ATRY Historic Dividend September 6th 2021

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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see Atreyu Capital Markets's earnings per share have risen 10% per annum over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last nine years, Atreyu Capital Markets has lifted its dividend by approximately 9.4% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

From a dividend perspective, should investors buy or avoid Atreyu Capital Markets? Earnings per share are growing at an attractive rate, and Atreyu Capital Markets is paying out a bit over half its profits. We think this is a pretty attractive combination, and would be interested in investigating Atreyu Capital Markets more closely.

On that note, you'll want to research what risks Atreyu Capital Markets is facing. To help with this, we've discovered 1 warning sign for Atreyu Capital Markets that you should be aware of before investing in their shares.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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