Be Sure To Check Out I.D.I. Insurance Company Ltd. (TLV:IDIN) Before It Goes Ex-Dividend

I.D.I. Insurance Company Ltd. (TLV:IDIN) is about to trade ex-dividend in the next three days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase I.D.I. Insurance's shares on or after the 28th of August, you won't be eligible to receive the dividend, when it is paid on the 7th of September.

The company's next dividend payment will be ₪4.0613934 per share, on the back of last year when the company paid a total of ₪13.12 to shareholders. Based on the last year's worth of payments, I.D.I. Insurance stock has a trailing yield of around 5.9% on the current share price of ₪223.80. 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! We need to see whether the dividend is covered by earnings and if it's growing.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

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 I.D.I. Insurance's payout ratio is modest, at just 35% of profit.

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.

See our latest analysis for I.D.I. Insurance

Click here to see how much of its profit I.D.I. Insurance paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. 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 encouraged by the steady growth at I.D.I. Insurance, with earnings per share up 8.2% on average over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. I.D.I. Insurance has delivered an average of 0.9% per year annual increase in its dividend, based on the past nine years of dividend payments.

Final Takeaway

Has I.D.I. Insurance got what it takes to maintain its dividend payments? I.D.I. Insurance 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, I.D.I. Insurance looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while I.D.I. Insurance looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To help with this, we've discovered 2 warning signs for I.D.I. Insurance that you should be aware of before investing in their shares.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.