Two Days Left To Buy Kerur Holdings Ltd. (TLV:KRUR) Before The Ex-Dividend Date

Kerur Holdings Ltd. (TLV:KRUR) is about to trade 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 important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase Kerur Holdings' shares before the 17th of December to receive the dividend, which will be paid on the 26th of December.

The company's next dividend payment will be ₪2.5442189 per share. Last year, in total, the company distributed ₪3.98 to shareholders. Based on the last year's worth of payments, Kerur Holdings has a trailing yield of 5.0% on the current stock price of ₪79.78. If you buy this business for its dividend, you should have an idea of whether Kerur Holdings's dividend is reliable and sustainable. So we need to investigate whether Kerur Holdings can afford its dividend, and if the dividend could grow.

See our latest analysis for Kerur Holdings

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. Kerur Holdings has a low and conservative payout ratio of just 10% of its income after tax. 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 45% 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. If earnings fall far enough, the company could be forced to cut its dividend. That explains why we're not overly excited about Kerur Holdings's flat earnings over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share. Recent earnings growth has been limited. However, companies that see their growth slow can often choose to pay out a greater percentage of earnings to shareholders, which could see the dividend continue to rise.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, seven years ago, Kerur Holdings has lifted its dividend by approximately 10% a year on average.

Final Takeaway

From a dividend perspective, should investors buy or avoid Kerur Holdings? 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. Overall we think this is an attractive combination and worthy of further research.

While it's tempting to invest in Kerur Holdings for the dividends alone, you should always be mindful of the risks involved. Be aware that Kerur Holdings is showing 2 warning signs in our investment analysis, and 1 of those is significant...

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.