I.B.I. Investment House Ltd (TLV:IBI) Passed Our Checks, And It's About To Pay A ₪0.7885717 Dividend

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 I.B.I. Investment House Ltd (TLV:IBI) is about to go ex-dividend in just three days. Typically, the ex-dividend date is one business day 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 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. In other words, investors can purchase I.B.I. Investment House's shares before the 2nd of April in order to be eligible for the dividend, which will be paid on the 9th of April.

The company's next dividend payment will be ₪0.7885717 per share. Last year, in total, the company distributed ₪6.20 to shareholders. Last year's total dividend payments show that I.B.I. Investment House has a trailing yield of 6.0% on the current share price of ₪103.20. 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.

View our latest analysis for I.B.I. Investment House

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. I.B.I. Investment House paid out 70% of its earnings to investors last year, a normal payout level for most businesses.

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 I.B.I. Investment House 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see I.B.I. Investment House's earnings have been skyrocketing, up 26% per annum for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, I.B.I. Investment House has increased its dividend at approximately 15% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

To Sum It Up

Has I.B.I. Investment House got what it takes to maintain its dividend payments? Earnings per share are growing at an attractive rate, and I.B.I. Investment House is paying out a bit over half its profits. Overall, I.B.I. Investment House looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while I.B.I. Investment House looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. In terms of investment risks, we've identified 1 warning sign with I.B.I. Investment House and understanding them should be part of your investment process.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.