Kerur Holdings Ltd. (TLV:KRUR) Pays A ₪0.6360547 Dividend In Just Two Days

It looks like Kerur Holdings Ltd. (TLV:KRUR) is about to go ex-dividend in the next two days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase Kerur Holdings' shares on or after the 2nd of September will not receive the dividend, which will be paid on the 9th of September.

The company's upcoming dividend is ₪0.6360547 a share, following on from the last 12 months, when the company distributed a total of ₪3.98 per share to shareholders. Based on the last year's worth of payments, Kerur Holdings has a trailing yield of 6.1% on the current stock price of ₪65.23. If you buy this business for its dividend, you should have an idea of whether Kerur Holdings's dividend is reliable and sustainable. As a result, readers should always check whether Kerur Holdings has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Kerur Holdings

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. That's why it's good to see Kerur Holdings paying out a modest 32% of its earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It distributed 36% of its free cash flow as dividends, a comfortable payout level for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit Kerur Holdings 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're not enthused to see that Kerur Holdings'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. Earnings per share growth in recent times has not been a standout. Yet there are several ways to grow the dividend, and one of them is simply that the company may choose to pay out more of its earnings as dividends.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last seven years, Kerur Holdings has lifted its dividend by approximately 10% a year on average.

Final Takeaway

Is Kerur Holdings an attractive dividend stock, or better left on the shelf? Earnings per share have been flat over this time, but we're intrigued to see that Kerur Holdings is paying out less than half its earnings and cash flow as dividends. This is interesting for a few reasons, as it suggests management may be reinvesting heavily in the business, but it also provides room to increase the dividend in time. Generally we like to see both low payout ratios and strong earnings per share growth, but Kerur Holdings is halfway there. There's a lot to like about Kerur Holdings, and we would prioritise taking a closer look at it.

On that note, you'll want to research what risks Kerur Holdings is facing. We've identified 2 warning signs with Kerur Holdings (at least 1 which is a bit concerning), and understanding these should be part of your investment process.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.