I.D.I. Insurance Company Ltd. (TLV:IDIN) Pays A ₪2.73 Dividend In Just Three Days

It looks like I.D.I. Insurance Company Ltd. (TLV:IDIN) is about to go ex-dividend in the next 3 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase I.D.I. Insurance's shares before the 28th of August in order to be eligible for the dividend, which will be paid on the 11th of September.

The company's next dividend payment will be ₪2.73 per share. Last year, in total, the company distributed ₪2.73 to shareholders. Looking at the last 12 months of distributions, I.D.I. Insurance has a trailing yield of approximately 3.2% on its current stock price of ₪84.49. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether I.D.I. Insurance has been able to grow its dividends, or if the dividend might be cut.

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

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. I.D.I. Insurance paid out a comfortable 35% 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 I.D.I. Insurance paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Readers will understand then, why we're concerned to see I.D.I. Insurance's earnings per share have dropped 11% a year over the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. I.D.I. Insurance's dividend payments per share have declined at 6.7% per year on average over the past nine years, which is uninspiring. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.

Final Takeaway

From a dividend perspective, should investors buy or avoid I.D.I. Insurance? I.D.I. Insurance's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We think there are likely better opportunities out there.

If you want to look further into I.D.I. Insurance, it's worth knowing the risks this business faces. To help with this, we've discovered 3 warning signs for I.D.I. Insurance (1 doesn't sit too well with us!) that you ought to be aware of before buying the shares.

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.