Here's What We Like About Harel Insurance Investments & Financial Services' (TLV:HARL) Upcoming Dividend

It looks like Harel Insurance Investments & Financial Services Ltd (TLV:HARL) is about to go ex-dividend in the next 2 days. Investors can purchase shares before the 31st of March in order to be eligible for this dividend, which will be paid on the 20th of April.

Harel Insurance Investments & Financial Services's next dividend payment will be ₪0.70 per share, on the back of last year when the company paid a total of ₪1.20 to shareholders. Based on the last year's worth of payments, Harel Insurance Investments & Financial Services has a trailing yield of 3.7% on the current stock price of ₪32.64. 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 Harel Insurance Investments & Financial Services can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Harel Insurance Investments & Financial Services

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Fortunately Harel Insurance Investments & Financial Services's payout ratio is modest, at just 36% of profit.

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

Click here to see how much of its profit Harel Insurance Investments & Financial Services 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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see Harel Insurance Investments & Financial Services earnings per share are up 9.3% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Harel Insurance Investments & Financial Services has delivered an average of 8.0% per year annual increase in its dividend, based on the past nine years of dividend payments. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Is Harel Insurance Investments & Financial Services an attractive dividend stock, or better left on the shelf? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. We think this is a pretty attractive combination, and would be interested in investigating Harel Insurance Investments & Financial Services more closely.

While it's tempting to invest in Harel Insurance Investments & Financial Services for the dividends alone, you should always be mindful of the risks involved. Our analysis shows 3 warning signs for Harel Insurance Investments & Financial Services that we strongly recommend you have a look at before investing in the company.

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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