Three Days Left To Buy I.B.I.- Managing & Underwriting Ltd (TLV:IBIU) Before The Ex-Dividend Date

I.B.I.- Managing & Underwriting Ltd (TLV:IBIU) is about to trade ex-dividend in the next three days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase I.B.I.- Managing & Underwriting's shares on or after the 2nd of December will not receive the dividend, which will be paid on the 10th of December.

The company's upcoming dividend is ₪0.8036985 a share, following on from the last 12 months, when the company distributed a total of ₪0.85 per share to shareholders. Last year's total dividend payments show that I.B.I.- Managing & Underwriting has a trailing yield of 7.3% on the current share price of ₪11.57. 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.

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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. I.B.I.- Managing & Underwriting paid out just 17% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

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

Check out our latest analysis for I.B.I.- Managing & Underwriting

Click here to see how much of its profit I.B.I.- Managing & Underwriting paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're not enthused to see that I.B.I.- Managing & Underwriting's earnings per share have remained effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

I.B.I.- Managing & Underwriting also issued more than 5% of its market cap in new stock during the past year, which we feel is likely to hurt its dividend prospects in the long run. Trying to grow the dividend while issuing large amounts of new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. I.B.I.- Managing & Underwriting's dividend payments per share have declined at 20% per year on average over the past four years, which is uninspiring.

The Bottom Line

Is I.B.I.- Managing & Underwriting an attractive dividend stock, or better left on the shelf? I.B.I.- Managing & Underwriting's earnings per share are basically flat over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We think there are likely better opportunities out there.

So if you want to do more digging on I.B.I.- Managing & Underwriting, you'll find it worthwhile knowing the risks that this stock faces. Every company has risks, and we've spotted 2 warning signs for I.B.I.- Managing & Underwriting (of which 1 makes us a bit uncomfortable!) you should know about.

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.