Here's What We Like About Keystone Infra's (TLV:KSTN) Upcoming Dividend

It looks like Keystone Infra Ltd (TLV:KSTN) is about to go ex-dividend in the next 3 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. 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. Meaning, you will need to purchase Keystone Infra's shares before the 20th of October to receive the dividend, which will be paid on the 27th of October.

The company's next dividend payment will be ₪0.112016 per share. Last year, in total, the company distributed ₪0.43 to shareholders. Based on the last year's worth of payments, Keystone Infra stock has a trailing yield of around 4.4% on the current share price of ₪9.864. 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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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Keystone Infra has a low and conservative payout ratio of just 11% of its income after tax.

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

See our latest analysis for Keystone Infra

Click here to see how much of its profit Keystone Infra 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Keystone Infra's earnings per share have been growing at 20% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Keystone Infra's dividend payments are broadly unchanged compared to where they were four years ago.

The Bottom Line

From a dividend perspective, should investors buy or avoid Keystone Infra? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. Keystone Infra ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

On that note, you'll want to research what risks Keystone Infra is facing. To that end, you should learn about the 2 warning signs we've spotted with Keystone Infra (including 1 which is potentially serious).

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.