I.B.I. Investment House Ltd (TLV:IBI) Will Pay A ₪2.56154 Dividend In Two Days

It looks like I.B.I. Investment House Ltd (TLV:IBI) is about to go ex-dividend in the next 2 days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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 I.B.I. Investment House's shares on or after the 4th of December will not receive the dividend, which will be paid on the 11th of December.

The company's upcoming dividend is ₪2.56154 a share, following on from the last 12 months, when the company distributed a total of ₪11.47 per share to shareholders. Looking at the last 12 months of distributions, I.B.I. Investment House has a trailing yield of approximately 4.0% on its current stock price of ₪285.80. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether I.B.I. Investment House can afford its dividend, and if the dividend could grow.

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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. I.B.I. Investment House distributed an unsustainably high 111% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious.

When the dividend payout ratio is high, as it is in this case, the dividend is usually at greater risk of being cut in the future.

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

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. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, I.B.I. Investment House's earnings per share have been growing at 16% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, I.B.I. Investment House has lifted its dividend by approximately 22% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

Final Takeaway

Is I.B.I. Investment House an attractive dividend stock, or better left on the shelf? I.B.I. Investment House has been generating credible earnings per share growth, although its dividend payments were not adequately covered by earnings. We think there are likely better opportunities out there.

With that being said, if dividends aren't your biggest concern with I.B.I. Investment House, you should know about the other risks facing this business. Case in point: We've spotted 2 warning signs for I.B.I. Investment House you should be aware of.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.