Income Investors Should Know That Nawi Brothers Group Ltd (TLV:NAWI) Goes Ex-Dividend Soon

Nawi Brothers Group Ltd (TLV:NAWI) is about to trade ex-dividend in the next day or so. If you purchase the stock on or after the 8th of December, you won't be eligible to receive this dividend, when it is paid on the 3rd of January.

Nawi Brothers Group's next dividend payment will be ₪0.40 per share, and in the last 12 months, the company paid a total of ₪0.80 per share. Based on the last year's worth of payments, Nawi Brothers Group has a trailing yield of 4.7% on the current stock price of ₪17. 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 Nawi Brothers Group can afford its dividend, and if the dividend could grow.

See our latest analysis for Nawi Brothers Group

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Nawi Brothers Group paid out a comfortable 30% of its profit last year.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit Nawi Brothers Group paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're discomforted by Nawi Brothers Group's 10% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last eight years, Nawi Brothers Group has lifted its dividend by approximately 4.2% a year on average.

The Bottom Line

Is Nawi Brothers Group worth buying for its dividend? Nawi Brothers Group's earnings per share are down 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. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're on the fence about its dividend prospects.

However if you're still interested in Nawi Brothers Group as a potential investment, you should definitely consider some of the risks involved with Nawi Brothers Group. We've identified 3 warning signs with Nawi Brothers Group (at least 1 which is concerning), and understanding them should be part of your investment process.

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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This article by Simply Wall St is general in nature. 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.
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