Opal Balance Investments Ltd (TLV:OPAL) Looks Interesting, And It's About To Pay A Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Opal Balance Investments Ltd (TLV:OPAL) is about to trade ex-dividend in the next couple of days. You can purchase shares before the 15th of March in order to receive the dividend, which the company will pay on the 24th of March.

Opal Balance Investments's next dividend payment will be ₪0.038 per share, and in the last 12 months, the company paid a total of ₪0.093 per share. Last year's total dividend payments show that Opal Balance Investments has a trailing yield of 2.7% on the current share price of ₪3.394. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Opal Balance Investments has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Opal Balance Investments

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Opal Balance Investments paid out a comfortable 46% 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 Opal Balance Investments 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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at Opal Balance Investments, with earnings per share up 6.0% on average over the last five years.

We'd also point out that Opal Balance Investments issued a meaningful number of new shares in the past year. 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.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Opal Balance Investments has seen its dividend decline 8.8% per annum on average over the past five years, which is not great to see. It's unusual to see earnings per share increasing at the same time as dividends per share have been in decline. We'd hope it's because the company is reinvesting heavily in its business, but it could also suggest business is lumpy.

Final Takeaway

Is Opal Balance Investments worth buying for its dividend? Opal Balance Investments has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Overall, Opal Balance Investments looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in Opal Balance Investments for the dividends alone, you should always be mindful of the risks involved. Our analysis shows 3 warning signs for Opal Balance Investments and you should be aware of these before buying any shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

If you’re looking to trade Opal Balance Investments, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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